Retail

Retail

Retail – Overview

Project starts, project-starts, main contract awards and detailed planning approvals all experienced declines on the previous year. On a more positive note, contract awards increased against the previous quarter thanks to the increase in major project awards. 

Totalling £261 million, retail work starting on-site during the first quarter of 2023 fell 4% against the preceding three months to stand 48% lower than a year ago. No major projects (£100 million or more) commenced on-site, unlike the previous quarter and a year ago. Underlying project-starts (less than £100 million) experienced a 32% fall against the preceding three months on a seasonally adjusted (SA) basis and 48% against the previous year.

Retail main contract awards totalled £336 million, an increase of 8% against the preceding quarter but a 40% fall against the same period a year ago. The value of major projects totalled £130 million during the period, an increase on the preceding quarter and previous year where no projects reached the contract awarded stage. Underlying contract awards decreased by 37% (SA) against the preceding three-month period to stand 63% lower than the previous year, totalling £206 million.

Detailed planning approvals, totalling £450 million, decreased 26% against the preceding three months, to stand 3% down on the previous year. There were no major planning approvals, which repeats the trend of the previous quarter and the preceding year. Underlying approvals fell 17% (SA) compared with the preceding three months and decreased 3% against the previous year.

Retail – Types of Projects Started

Supermarkets, totalling £174.5 million, accounted for 67% of all retail project-starts during the three months to March. The value of starts in this segment decreased 40% on the previous year. Shop projects commencing on-site added up to £43 million, a 70% decline against the previous year to account for 16% of the sector. Accounting for 8% of the sector, petrol filling stations also experienced a decline of 7% against the first quarter of 2022 to total £21.1 million.

Shopping centres accounted for 3% with a total of £6.7 million, having decreased 35% on the previous year. Unlike last year, there were no retail warehousing projects starting on-site during the first quarter of 2023.

Regional Analysis – Project-Starts

Scotland was the most active region accounting for almost a fifth of all retail project-starts nationwide, thanks to the value doubling against the previous year to total £49 million. Retail projects in Scotland included a £7.77 million discount store and supermarket development in Glasgow (Project ID: 21338484). The North West was the only other region that experienced growth, having increased 78% on a year ago. The total added up to £37 million, a 14% share of the sector.

In contrast, despite having the second highest share of 18%, projects starting on-site in the South East slipped back 16% against last year, totalling £46 million. London had the sharpest decline at 87% bringing its total down to £19 million, a 7% share of the sector. Further decline in the capital was prevented by a £5.3 million shopping centre alteration project in North London (#Project ID: 22349379). The East of England (£18 million) and the North East (£17 million) also held the same percentage of the total value, projects starting on-site in these two regions decreased 73% and 34% respectively. The East Midlands and the West Midlands each accounted for 5% of project-starts, having declined 27% and 61% respectively.

Retail Project-Starts during the three months to March 2023

Regional Analysis – Detailed Planning Approvals

The three months to March was a strong period for retail planning approvals in most of the UK. London had the highest proportion of retail approvals, with a 16% share, and jumped 77% against last year’s levels, to total £73 million. Consents in the Capital were boosted by a £47.16 million mixed use development in Southwark (Project ID: 19164666). The East Midlands experienced an increase of 44% in planning approvals, accounting for 13% of the sector and totalling £57 million, making it the second most active region. Growth in the region was accelerated by a £25 million builders merchant development in Nottingham (Project ID: 22290529).

Approvals in Scotland climbed 7% and totalled £48 million, accounting for 11% of the sector. At £41 million, the North East accounted for 9% of approvals, having grown 54%. Northern Ireland and the West Midlands each accounted for 8% of the sector, with the value increasing 10% and 34% on the previous year respectively. The North West, on the other hand, fell 2% against the 2022 levels to total £47 million, despite accounting for a tenth of approvals in the sector.

Retail Detailed Planning Approvals during the three months to March 2023

Forecast Construction-Starts for Retail

Note: Underlying projects are schemes with a construction value of £250,000 to £100 million.  Forecast updated in March 2023 p – provisional, f – forecast.
Source: Glenigan