A wave of investment in town centres will fail to reverse the migration of sales to out of town retail parks, according to new reports from Verdict Research.
Out of Town Retailing 2008 and Town Centre Retailing 2008 state that the huge amount of space set to arrive in town centres is arriving at the worst possible time and create even more problems than it solves.
Although out of town retailing has been harder hit than town centres by the current downturn, landlords and retailers have made a concerted effort to improve the out of town shopping experience - and for this reason, Verdict believes it will bounce back and lead the recovery.
"Out of town retailing will have to become a more attractive shopping location, appealing to a broader spectrum of society and shoppers," said Malcolm Pinkerton, senior analyst at Verdict Research and report author. "The key to its future growth lies in improving facilities and a greater choice of shops that collectively generate high levels of footfall, longer dwell times and higher spend per head."
Overall, Verdict expects out of town sales will grow by 23.2 per cent over the next five years. This compares to the 0.4 per cent sales growth expected from town centres.
Despite an investment in new space on the High Street, this will not correspond to an increase in sales, with sales densities and like-for-like performances plummeting. Clothing and footwear retailers will struggle to maintain the growth they have enjoyed in the past, due to increasing competition from out of town outlets.
In addition, home-related and electricals retailers are moving out of town in search of larger and cheaper premises.
"The town centre is facing a significant oversupply of space in the next few years, at the worst possible time, and it will be the older space that loses out," said Pinkerton. "Moreover, in the short-term at least we are likely to see a huge glut of unwanted space. Those retailers that remain in town centres will want to be present in the newest developments, leaving some town centre locations empty and desolate."