The English regions, for some time routinely trampled over by ambitious professionals on their route to the gold-paved streets of London, are becoming a more attractive option again, thanks largely to the capital’s astronomical rise in housing costs. Subsequent changes in employment and lifestyle trends could mean more opportunities for visionary retailers
When English scribe Dr Samuel Johnson told his friend the Scottish lawyer James Boswell that when a man tires of London, he tires of life because “there is in London all that life can afford,” clearly he had not been outbid by a Singapore pension fund for a £450,000 one-bedroom flat in New Cross Gate.
While the late doctor would still be pleased to know that London holds many affordable attractions, housing is not one of them. Increasingly, professionals are either leaving or bypassing the city in favour of areas where they are not required to spend their entire salary on rent or mortgages.
The latest figures from the Office of National Statistics show that, in the year to June 2013, 58,220 people aged 30-39 left the capital – the highest number on record – and a 10% increase on the number registered in 2010. The ONS figures are based on an analysis of NHS patient registers, so will not include everyone who moves away from the capital, and therefore the numbers are almost certainly higher. Much unoffical evidence since points to a continuation of that trend.
Regional retail expansion
Londoners are celebrated early adopters of trends, and city dwellers understandably want to see the diverse and exciting London food and social scenes replicated in their next place of abode.
For independent, c-store, and smaller supermarket chains this demographic change coincides with a general consumer trend for shopping in more compact and convenience stores.
According to Dr Roberta Cook, from the department of agricultural and resource economics at the University of California, Davis, the smaller store expansion could benefit the fresh produce industry as it puts the product within ‘arm’s reach, and therefore create more demand.
She adds: “More than ever it is necessary for firms to differentiate, get out of the commodity trap, or not be caught in the deadly ‘middle’.” And this is where fresh food can play a leading role, as an attraction for those who shop for high quality, and diverse, produce.
Competitive pricing in Kent
Grocery is certainly one of the driving forces behind the planned expansion of the Macknade store in Faversham, Kent. This independent retailer is to add a further 16,000-17,000 sq ft to its existing 8,000 sq ft to create a new food hall anchored by a butchery and an extended fresh produce range.
“We are very competitively priced compared with the supermarkets, and the quality is excellent, that brings in a lot of custom,” says managing director Stefano Cuomo.
“We try to source as much locally as we can, but if the quality or taste is not there, then we source from other routes such as [New] Covent Garden Market. We are very much about seasonality, and we are happy to work with small producers through to larger suppliers.”
Cuomo says the business has the confidence to expand due to customer demand and the increasing numbers of food conscious consumers in surrounding areas. Faversham, which already has a reputation as a food-focused town with a weekly farmer’s market, is growing in popularity with commuters. There are also plans to create a new garden city in nearby commuter-ville Ebbsfleet.
Waitrose’s caution
On a larger scale, Waitrose is rapidly rolling out new stores, having initially acquired seven from The Co-operative Group in 2013 largely in the south east, but with more being added elsewhere, including one in Wollaton, Nottingham.
James Armstrong, property and development communications manager, says it carefully considers where to open next. “Our policy has always been to evaluate thoroughly every new opportunity to ensure it is the right one for us in the long term, in whatever format that takes. In the current marketplace, this is more prudent than ever,” he explains.
“We have a location planning team which will identify new areas for us having carefully considered a number of factors, including catchment, existing competition, proximity to existing Waitrose branches, size of the site, parking capacity.
“We very much take a long-term view. We need to be confident stores are sustainable and enable us to make a positive and lasting contribution to the area in which we will trade.”
The fact that the mid-sized premium retailer is opening plenty of locations outside of London, and in regions such as Kent, Staffordshire and the East Midlands, and refurbishing stores in the north of England such as Alderley Edge in Cheshire, is a positive sign for those aiming to promote the regions as capable of matching London’s growth.
Northern potential
Ed Cox, director of the northern think tank IPPR North, says the north’s potential is starting to be recognised.
“While there have long been calls for a rebalancing of the UK economy, the evidence that more closely connected northern cities will bring significant economic benefits for the whole nation is now clear,” he adds.
“In 10 years’ time, with the right leadership and with a revitalised local democracy, there is no reason why the north of England shouldn’t take its place alongside the most prosperous northern European regions.”
However, clearly not all towns and cities outside the capital are enjoying an economic revival, and as Waitrose’s Armstrong says, locations need to be chosen carefully.
Bullish Booths
The upmarket northern supermarket chain Booths is in the process of re-structuring its business too, with plans to close stores in Ansdell and Marton later this year while preparations are ongoing for three more to open in 2015 to add to one that already has, in Hale Barns.
Retail director Paul Minett has explained that some stores were not as profitable, and it was important to recognise this in order to secure a bright future for the business.
As the four major supermarkets continue to evaluate what to do in the face of tough competition from discounters, and a changing shopping landscape where little, often, and exciting is preferred over big weekly shops, perhaps the door is ajar for a growing band of smaller retailers to barge through and grasp the opportunities presented by a gradual regional renaissance.
