The launch of the CRE Corner Podcast hosted by David Fuller-Watts, marks a space for candid conversations on commercial real estate; the good, the bad and the downright controversial. Whether you’re in the CRE industry or looking to stay ahead of retail trends, rest assured you’ve found your industry corner.
The first episode of the series kicks off with Stephen Springham, Partner and Head of Retail Research at Knight Frank, discussing the challenges and opportunities the retail sector faces today, and the opportunities to look out for in 2025.
For those of you who prefer the written word over audio, we’ve summed up Stephen’s experience and the key takeaways from his conversation with David below.
Who is Stephen Springham?
Stephen has 32 years in retail, around 20 of which have been in the retail property. Starting out as a retail analyst, which he described as somewhat of a spiritual home, he then moved on to management horizons and verdicts, into retail management consultancy for PWC, later finding a passion in retail research. Now, Stephen Heads up Retail Research at Knight Frank where he’s been for the last 10 years.
Episode #1 Wrapped
Retail Performance in 2024
Stephen begins by weighing in on how retail fared in the first half of 2024 and though it held steady, there’s certainly room for improvement.
While the key indicators show consumer sentiments are still fragile, despite a slowly recovering economic landscape, retailers have learned from past mistakes and are honing in on streamlined operations for their assets and portfolios. Unsurprisingly, sustainability remains at the forefront of strategies this year.
Sector Trends and the Changing Market
The discussion touches on the hierarchy within retail channels, with retail warehousing leading the pack, followed by food & beverages, with traditional high street shopping closely behind.
Stephen emphasises that oversupply remains a structural issue in many cities, but prime shopping centres continue to experience high demand, although vacancy rates vary widely depending on the location.
The Role of Government and Policy
As the UK moves into the second half of 2024, the political climate following the general election in the UK comes into play. Both Stephen and David considered whether new policies will influence a true retail revival. Stability, they argue, is key, and while challenges persist, there’s cautious optimism about interest rate cuts and the potential for growth in investment markets.
The Role of Government and Policy
As the UK moves into the second half of 2024, the political climate following the general election in the UK comes into play. Both Stephen and David considered whether new policies will influence a true retail revival. Stability, they argue, is key, and while challenges persist, there’s cautious optimism about interest rate cuts and the potential for growth in investment markets.
The Intersection of Retail and Online
One of the major talking points in this episode is the ongoing debate around the balance between physical stores and online shopping. Stephen highlights that post-pandemic trends show a more pragmatic approach, where retailers recognise the symbiotic relationship between physical locations and online presence. Rather than cannibalising each other, these two elements need to work in tandem to build stronger, more resilient brands.
Leisure and Mixed-Use Developments
Another critical trend discussed is the blending of leisure and retail spaces, with landlords increasingly integrating food and beverage (F&B) outlets, gyms, and coworking spaces to create mixed-use developments. This shift is seen as crucial for the future of retail, turning shopping centres into community hubs. Yet, finding the right balance remains a challenge, experienced by both successful and struggling developments across the UK.
The Growing Concern of Retail Crime
A pressing issue that Stephen and David refer to as a “virus” in the retail world is the alarming rise of retail crime. The ease with which shoplifters operate due to lax enforcement is a major concern for retailers and shopworkers alike. Retailers are losing millions annually, and while efforts are being made, more robust legal measures are still needed to protect businesses.
Sustainability in Retail Real Estate
The conversation concludes with a focus on sustainability in retail real estate. Retail is seen as lagging behind other sectors in implementing sustainable practices, but new builds are leading the way. Stephen explains that retrofitting existing buildings remains a challenge, but forward-thinking retailers like IKEA are already finding strategic ways to make ESG goals work in their favour.
Want to Hear the Full Episode?
While, we’ve highlighted the key insights from the episode, Stephen and David weren’t shy to say it how it is, which you’ll miss out on without the full audio. From insights on consumer behaviour, retailer survival, and the impact of government policy, to the nuances of mixed-use developments, this episode offers a candid look at the forces shaping the retail world today.