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The Bastle House 1 Golden Square
Haltwhistle Northumberland
NE49 0BY Tel: 07768 613291
Review of Retail Capacity, Investment Potential
and Strategy for the City and County of Swansea
Final Combined Summary Report October 2013
1
1. Executive Summary ........................................................................................................................................................................ 2 2. The Brief ......................................................................................................................................................................................... 4
Purpose of Study ......................................................................................................................................................................... 4 Study Aims .................................................................................................................................................................................. 4 Study Context ............................................................................................................................................................................. 4
3. Methodology ................................................................................................................................................................................. 6 Specific Methodologies .............................................................................................................................................................. 8
4. Market Background and Context ................................................................................................................................................. 11 Retail Sector performance (Macro Overview) .......................................................................................................................... 11 Category Performance .............................................................................................................................................................. 11 Food Stores ............................................................................................................................................................................... 12 Asset class performance (Retail landscape) ............................................................................................................................. 13 The Growth in Online ............................................................................................................................................................... 15 Often forgotten facts Impacting Retail Formats ....................................................................................................................... 18
5. The Swansea Perspective ............................................................................................................................................................. 20 A Summary of Facts and Figures ............................................................................................................................................... 20
6. Consumer Perspective from the Surveys ..................................................................................................................................... 22 7. Consumer Perspective from the Focus Groups ........................................................................................................................... 25 8. The Retailer Perspective .............................................................................................................................................................. 26 9. Current position of key projects .................................................................................................................................................. 30 10. The Planning Perspective ........................................................................................................................................................... 32
Objectives ................................................................................................................................................................................. 34 Key Principles ............................................................................................................................................................................ 34 Retail Hierarchy ........................................................................................................................................................................ 34 Retail Development Criteria ..................................................................................................................................................... 34 City Centre Sub Hierarchy ......................................................................................................................................................... 35 City Centre Retail and Leisure Core .......................................................................................................................................... 35 District Centres ......................................................................................................................................................................... 36 Parc Tawe ................................................................................................................................................................................. 36 Other Retail Parks ..................................................................................................................................................................... 37 Bulky Goods Retail .................................................................................................................................................................... 37 Out-‐of-‐Centre Retail Development ........................................................................................................................................... 37 St. David’s/ Quadrant Area ....................................................................................................................................................... 38
11. Conclusions ................................................................................................................................................................................ 39
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1. Executive Summary
1.1 Swansea City Centre is currently failing in its retail and leisure offer with poorly configured retail space, a
lack of complementary leisure opportunities, a dated environment and a relatively weak tenant profile for
what is Wales’ second City. More importantly however, Swansea City Centre has a catchment capable of
supporting a regionally dominant leisure and retail scheme in keeping with the needs of a city region. In
order to deliver a significantly enhanced level of performance and a regionally dominant scheme of this
nature, there are a number of key challenges that need to be addressed:
1.2 The catchment perceives Swansea City Centre as tired, dated and declining with an average offer. This is
coupled with perceptions of a complex traffic system, vehicle congestion and poor/expensive car parking.
The ability to provide prime space in the right place that is easily accessible is now a priority for councils, and
protecting and enhancing town centre’s in particular is critical as consumers seek out “destinations” capable
of delivering an experience above and beyond the simple retail offer. Retail parks offer retailers flexible,
affordable space, perfectly suited to the retailers current need to “play” with changing integrated formats.
The convenient retail park offer within Swansea currently appeals more than the compromised, disjointed
city centre offer. However the ambition of the catchment remains strong for an aspirational, integrated and
coherent city centre core capable of supporting city region status and delivering a long-‐term 24-‐hour
economy. Cannibalising future potential city centre spend through increased out of town provision poses an
increasing threat to the city centre vision. The Council and the Welsh Government must therefore ensure all
future development opportunities are considered in light of a city centre first policy requirement.
1.3 There is a significant trading gap available within the catchment that creates an attractive investment
opportunity. However, the current sales densities being delivered within the city centre do not reflect the
trading gap available. This is due to the quality of space. As a result net development additions alone will
not deliver a thriving retail core and redeveloped space from within the existing retail and leisure provision
should also be considered. Additional significant new retail and leisure development within the county and
the city region should be avoided at locations outside the city centre core area unless it can be proven that it
will not harm / cannibalise existing trade or the future ambitions of the city. In addition out of town parking
charges should be given due consideration in order to redress some of the practical financial advantages of
the out of town offer.
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1.4 The St David’s/Quadrant area located within the core of the city centre is identified as the priority
development site to deliver the necessary retail and leisure led scheme. Small format department stores, a
quality dining offer and a cinema should represent core parts of the vision for the initial stages of
development at this site. A phased approach to development is supported from both a consumer and a
retailer perspective and will enable a more ambitious vision to be delivered. Given the importance of
department store development and the need to deliver improved rental sustainability levels in stage one, a
phased approach should attract a higher, more aspirational mix for phase two and for the city as a whole.
1.5 The complementary districts within the city centre and the district centres throughout the wider county will
only thrive once Swansea’s retail and leisure core is developed and the profile of the city and county
improves over time as a result. Broadening out the mix of use in order to deliver office worker, residential,
tourism and catchment spend is a basic requirement for a sustainable ‘ten-‐til-‐ten economy’ for the city and a
sustainable level of late night retail and leisure footfall for the scheme. A successful ten-‐til-‐ten economy is
the key stepping stone to delivering a thriving 24 hour retail and leisure economy.
1.6 As the principle property owner the Council is uniquely positioned to have a proactive stance in relation to
the development of the City Centre and should not be fearful of driving the investment and retail
regeneration agenda.
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2. The Brief
2.1 Purpose of Study 2.1.1 The City and County of Swansea Council (‘the Council’) in conjunction with the Welsh Government
commissioned a consortium of consultants led by The Strategic Insight Consultancy and including FSP Retail
Consultants, DTZ and Emotional Logic to undertake an assessment of retail investment opportunity for the
area, in order that the Council’s significant regeneration agenda can be achieved.
2.2 Study Aims 2.2.1. Inform decision making on development proposals by providing a robust, up-‐to-‐date evidence base that will
provide compelling retailer/occupier data capable of convincing occupiers, investors and developers to
invest time and money in Swansea.
2.2.2 Guide the Council’s future retail strategy and policies, including the forthcoming Swansea Local
Development Plan (LDP).
2.3 Study Context 2.3.1 The most recent retail capacity study for Swansea was published in 2005. Since that time there have been
significant changes to economic circumstances and adjustments to patterns of retailing activity and the
market view of a mix of uses at both national and local level. This has included changes to consumer
expenditure, shopping habits, store turnovers, patterns of retail investment and future retail commitments.
2.3.2 Swansea City Centre lies at the top of the established local retail hierarchy and also provides a regional focus
for shopping activities. Regenerating the City Centre is therefore seen as a key driver for delivering economic
regeneration across south west Wales. In this context, securing a step change in future retail provision
within the City Centre core, and preventing development that poses a threat to this core area going forward,
is critical to meeting the regeneration requirements of the Council and its key partner the Welsh
Government.
2.3.3 In partnership with the Welsh Government, the Council is seeking to work with a development partner to
lead the redevelopment of the City Centre. The redevelopment is to comprise a retail-‐led, mixed-‐use
regeneration scheme in the heart of the City’s retail core area.
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2.3.4 The Council’s aspirations for the City Centre are currently set out in the Swansea City Centre Strategic
Framework (SCCSF, 2007), which includes proposals for a significant new retail-‐led mixed-‐use scheme that
can deliver a step change in retail provision and improve links from the City Centre to the sea. DTZ have
reviewed the retail strategy set out in the SCCSF since its publication, particularly in light of changes to the
economic climate and have concluded that the retail elements of the SCCSF still holds good, but that delivery
of a new retail-‐led scheme needs to be undertaken on a phased basis.
2.3.5 Swansea City Centre is supported by a network of district and local centres that help to sustain community
life and provide access at a local level to retailing and other supporting facilities. Maintaining these centres
as viable and attractive destinations, and securing their future viability, is a key challenge.
2.3.6 The Council has commenced work on a new development plan, known as the Swansea LDP. This will replace
the current Unitary Development Plan (UDP) and eventually become the adopted local planning policy
framework for Swansea for the period to 2025. The outputs from the study will inform the LDP ‘Preferred
Strategy’, which provides the overall growth framework for the City and County. It will also provide evidence
to guide more detailed policies and strategies to be set out in the ‘Deposit’ LDP anticipated for publication in
2015.
2.3.7 The overriding objective of the study is to produce a robust, empirically based report that will stand up to
detailed scrutiny and independent examination as part of the LDP process and to provide a sound basis for
decision making for the delivery and marketing of Swansea City Centre to attract a sustainable mix of
occupiers, developers and investors. The report will be a key supporting document that will underpin the
Council’s future retail and mixed-‐use strategies, planning policies, property development, grant bidding and
marketing activities.
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3. Methodology 3.1 The study methodology is robust and based on a clear understanding of the research requirements and
overarching aims. These are to:
3.1.1 Identify Swansea’s present catchment and identify how/if completing phased development in the
locations earmarked for development will change the city’s retail potential through improvements in
market share, shopper profile, shopper spending power and reductions in leakage to competing
centres such as Cardiff, Cribbs, Bristol, Bath and Carmarthen
3.1.2 Within the current offer in the city centre assess the current market share of sales by merchandise
category and its consequent degree of competition
3.1.3 Identify primary, secondary and tertiary pitch levels within the city
3.1.4 Recognise within the catchment the effect of out-‐of-‐town shopping locations, grocery superstores
and competing retail and leisure destinations on sales potential in Swansea city centre
3.1.5 Assess where the current/potentially improved retail and leisure offer of Swansea sits in local and
national retail centre rankings and to identify a realistic set of current/future benchmark locations
through which levels of retail and leisure performance can be determined
3.1.6 Evaluate local demand for a range of typical leisure and catering facilities by combining consumer
based estimates of demand with an assessment of the existing provision
3.1.7 Establish through analysis of shopper expenditure, consumer lifestyles and retail provision at
comparable centres, guidelines on the most appropriate and sustainable mix of occupiers required
to meet consumer needs and serve/develop the market potential in Swansea
3.1.8 Identify suitable occupier candidates and produce evidence to build a compelling case for targets to
commit to launch new outlets
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3.1.9 Establish a clear understanding of consumer perceptions in order to develop a revised positioning
strategy capable of delivering competitive advantage and asset performance
3.1.10 Provide clear set of conclusions and recommendations that are capable of driving the development
brief forward
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3.2 Specific Methodologies 3.2.1 As part of the commission the Strategic Insight Consultancy has led a consortium bid of consultants each
with a specific project brief. Members of the consortium were DTZ, Emotional Logic and FSP, each of which
followed an agreed methodology as follows:
3.3 DTZ have:
3.3.1 Assessed how the Council’s retail led city centre regeneration proposals can be delivered and advised on
policy and practical interventions required to deliver such proposals
3.3.2 Evaluated local demand for a range of typical leisure, catering and cultural facilities by combining consumer
based estimates of demand with an assessment of the existing provision
3.3.3 Identified key areas of asset value growth within the City Centre and provided compelling retailer data to
drive lettings and investment
3.3.4 Considered the demand and potential for delivery of a series, or one significant, leisure/cultural building to
support the economy for ‘city break’ tourism
3.3.5 Reviewed the existing planning policy framework for Swansea;
3.3.6 Reviewed the available planning history information for out of centre retail parks
3.3.7 Identified deficiencies in Retail which included undertaking a high level qualitative assessment across the
county reviewing the list of sites
3.3.8 Set out recommendations for a holistic retail strategy and policy framework necessary to safeguard
Swansea’s future retail hierarchy.
3.4 Emotional Logic have:
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3.4.1 Undertaken a quantitative survey capable of identifying the catchment potential of Swansea City Centre and
the relative strengths and weaknesses of the competing retail destinations. A full consumer insight survey
has been completed on the street at key locations in the city. The survey assessed:
a. Shopper behaviour
b. Spend levels
c. Competitive benchmark
d. Segmentation profiling – values and socio demographics
3.4.2 Used a robust sample size for the full survey (up to 30 questions) of 1,000.
3.4.3 Surveyed an additional 2,000 respondents on spend, frequency and competing locations in relation to the
catchment analysis and the battleground analysis
3.4.4 Provided qualitative focus groups focusing on current behaviours and motivations as well as future wants
and needs. The Focus Groups provided a qualitative assessment to measure shopping behaviour and
perceptions.
3.4.5 Combined quantitative and qualitative research so that we clearly understand what happens but also most
significantly why it happens. The split in locations for the focus groups provides a detailed understanding of
both the primary as well as the secondary and tertiary catchments retail and leisure behaviour.
3.5 FSP have:
3.5.1 Undertaken a full retail and catering audit of Swansea city centre prime space
3.5.2 Identified retail sales and selling space by merchandise category.
3.5.3 Forecasted expenditure by merchandise category
3.5.4 Assessed the size, location, configuration and condition of existing retailers in prime and secondary locations
in the city centre.
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3.5.6 Reviewed the price and market positioning of streets/zones within the city centre
3.5.7 Established an absent retailer list.
3.5.8 Developed a set of merchandise mix guidelines comprising recommendations on the ideal split between
retail, catering and leisure and also between anchors, LSUs, multiples and independents
3.5.9 Undertaken tenant mix and trading gap analysis
3.5.10 Reviewed footfall anchor and LSU roles in the City Centre and the retailers best equipped to perform these
roles and optimise sales/rent
3.5.11 Assessed prime and total retail space while identifying the optimum capacity for the city centre sites taking
into account the quantity and size of competing catchments
3.5.12 Undertaken Gap and Impact analysis – retail and leisure performance
3.5.13 Undertaken financial sustainability analysis
3.5.14 Estimated space conversions and sustainable rents for the years agreed with the Client and compare with
ERVs
3.5.15 Deployed the growth rates agreed with the client and the team to reflect a ‘House’ view of potential
3.6 The Strategic Insight Consultancy has co-‐ordinated the project, combined the strategic findings and provided
background market context for the report.
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4. Market Background and Context
4.1 Retail Sector Performance (Macro Overview) 4.1.1 UK retail although mature is still growing.
4.1.2 UK consumers will spend £300bn in retail in 2013, up 1.7% on 2012. Although this is still low growth, it does
mean that consumers will spend £4.9bn more in retail this year than last, and this is the highest increase
since 2008.
4.1.3 ONS and BRC together point to an underlying strength in retail sales.
4.1.4 Customers now expect a choice about how, when and where they shop.
4.2 Category Performance
4.2.1 All sectors other than Books, news and stationery together with music and video show growth to 2017.
Forecast growth (%), 2017 on 2013
4.2.2 If we review changes in retail expenditure between 2007 and 2012(see above), Home-‐related sectors have
suffered a £9.7bn decline since 2007
4.2.3 Well-‐being market confirmed as growing with Food & grocery (£23.9bn), clothing (£4.6bn) and health &
beauty (£3bn) growing by a total of £31.4bn since 2007
CM00243-011 UK RETAIL REVIEW & FORECASTS TO 2017
Clothing most attractive sector for new entrants and growth opportunities
Summary of sector forecasts to 2017
Source: Verdict Research
Forecast growth (%), 2017 on 2013
Forecast growth (£bn), 2017 on 2013
Total retail sector growth, 2012–17
Source: Verdict Research
Total online retail growth, 2012–17
12"
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Change in retail expenditure (£bn) 2007-‐2012
4.3 Food Stores
4.3.1 Share of spend for food and grocery is becoming more important, with 45% of the expenditure falling into
this sector (+37% compared to 2007) -‐ because of increase in food prices (Source: Verdict).
Sector share (%) of total retail expenditure 2012
4.3.2 This has resulted in a decreased budget for non-‐food shopping – down to 54.6% in 2013 compared to 61.6%
in 2007 (Source: Verdict).
4.3.3 Competition and choice intensify within the sector as:
a. Consumes are price and convenience-‐led.
b. More spread between shops (Source: Verdict).
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c. Less discretionary spend online.
4.3.4 Shopping is no longer a weekly activity. It is now split into monthly out of town “big shops” and “top-‐up”
shops at local stores (Source: Verdict)
4.3.5 Online grocery shopping is a solution consumers continue to turn to (30.1% of the online retail expenditure –
Total retail expenditure will grow from £31.1m in 2012 to £50m in 2017) (Source: Verdict).
4.3.6 Retailers see core strengths to the online solution in that it reduces shopper wandering and avoids big stores
but on the down side it requires more delivery points, needs more variously skilled employees and increases
costs due to the need to “pick” (customers do this for the grocer in store currently).
4.3.7 The main opportunities for Grocery on line come from: 65+, families with children and immigrants however,
local “top up” stores allow older people to shop and maintain a social aspect.
4.4 Asset Class Performance (Retail Landscape)
4.4.1 There are in the order of 60 currently active buyers in the market from the REITS to the UK institutions, UK
property companies, opportunity funds, private individuals and sovereign wealth funds. This is a c.30%
increase on the same time in 2012.
4.4.2 There are currently 18 shopping centres under offer totalling £539m and 29 shopping centres in the market
accounting for £1.88bn.
4.4.3 In 2012 55% of the transactional volume was for in-‐town, cinema anchored leisure destinations and in town
will be the location of choice in 2013.
4.4.4 It is the lack of prime on the high street and weak development pipeline that is driving spend out of town.
4.4.5 In Retail week 1st May 2012 JLL published-‐ “up to 25% of existing shopping centre and high street leases are
due to expire by 2013, or 50% by 2015, versus about 5% and 15% for retail parks by 2013 and 2015”. This
disposal frees up demand with a true ‘flight to prime’.
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4.4.6 One major impact of this glut of supply is that solvent retailers who are trying to rationalise their high street
portfolios are only able to achieve this through lease expiries now, rather than through marketing due to the
level of incentive required by acquiring retailers e.g. Thomas Cook are indicating that they will be closing 195
stores which is realistically only going to happen through key trigger dates in their leases rather than through
a rush of demand from retailers that can’t be satisfied through existing stock.
4.4.7 Due to weak demand for mature space retailers are taking a “convenient” rather than “strategic” approach
to lease disposal. This is resulting in profitable store locations closing due to the opportunity to reduce the
property portfolio. Put simply, there is not enough ‘new-‐blood’ for new entrants to fill all the prime/ good
secondary stock being released in the biggest towns and cities. There is more than enough demand from
existing occupiers that want to upgrade, but they are commonly encumbered with shops of a character, or
lease conditions, that make them difficult to re-‐let. That is the underlying blockage slowing everything up:
legacy properties.
4.4.8 In this market Retail Rankings and overall performance matters. Swansea currently ranks 45 in the National
Survey of Local Shopping Patterns (NSLSP) and sits outside the top 50 in the CACI model. International
retailers are looking at the top 30 locations (LDC, Retail Week May 2013).
4.4.9 The level of void space in High streets is leading to a perception by the consumer that high streets are in
decline, reinforced by media coverage that often focuses on town centres, even when a significant amount
of void space may be being kept back for future development.
4.4.10 However, despite the Internet, sales space has continued growing in net terms throughout the downturn:
the oft-‐predicted retail space-‐fallout due to the Internet has just not happened.
4.4.11 Out of town shopping centres remain the preferred retailer format as mainstream out-‐of-‐town shopping
centre space provides a more productive platform for comparison goods shopping than retail park stock.
4.4.12 There is a significant long-‐term shift in consumer spending to retail parks (and away from town centres) and
a major polarisation in retail parks with an elite group attracting many fashion retailers (e.g. almost half of
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Next’s store portfolio is located in retail parks). There are many growth categories e.g. hard discount are
now looking primarily at retail parks as the driver of their next phase of growth rather than traditional town
centre locations.
4.4.13 CACI’s own research suggests that spending in stores increases by 30% when shoppers make use of a leisure
offer in the same visit.
4.4.14 “Nine to Five” towns are dying. “Ten til Ten” locations are the destinations of the future as consumers crave
access to experiences, both retail and leisure, at a time convenient to them.
4.5 The Growth in Online
4.5.1 30.7m people shop online in the UK (77.1% of all internet users)
4.5.2 Leading Clothing retailers such as Aurora are targeting ecommerce sales to represent 25% of their turnover
over the next 3-‐4 years.
4.5.3 Books: by 2016 70% of purchases will be online
4.5.4 Music & Video: almost entirely online by 2016
4.5.6 Health & Beauty: expected to grow as also linked to groceries
4.5.7 Shoppers aged between 15 and 24 (£549.42) and over 55 (£469.83) were below average for shopper
penetration and spend per head when compared to the other age groups (£1579.04 for 35-‐44 group)
4.5.8 The vast majority of shoppers still buy more clothes in store than online although the proportions have
decreased from 43% to 36% between 2010 and 2012 (see below).
Attitudes towards shopping and browsing on line for clothes, February 2010, January 2011 and January 2012.
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Source GMI / MIntel
4.5.9 The Internet’s rapid growth to date has depended very heavily upon cannibalising the traditional home
delivery business. By the end of 2012, 46% of UK Internet retail sales were captured from non-‐store markets
(mail-‐order, TV-‐shopping, traditional orderables, etc.).
4.5.10 The UK online retail sector is the largest and most mature in Europe. This has been driven by the ability of
retailers in the UK to capitalize on a number of unique benefits that the UK has to offer:
a. Large affluent population coupled with high population densities.
b. High broadband penetration and adoption of mobile devices.
c. A relatively consolidated retail sector with a small number of retail companies dominating.
12 11
43
17 1715
11
39
18 17
22
16
36
15
11
0
5
10
15
20
25
30
35
40
45
50
I buy more clothesonline than in-‐store
I buy around thesame amount ofclothes online and
in-‐store
I buy clothes online,but buy more clothes
in-‐store
I have browsed forclothes online buthave never bought
I have neverbrowsed for clothes
online
%
2010 2011 2012IN_ternet
Annual Internet sales growth rates have
more than halved since 2007. Based on
current trends, Internet growth rates will
dip to single figures as early as 2014/2015. So
why, despite the pervasive media hype attaching
to anything Internet, does online sales growth
appear to be running out of steam so early? After
all, even allowing for maturation, the growth rate
decline is much sharper than expected.
ONS figures reveal that Internet sales reached
9.31% of total UK retail sales in 2012, up from
8.28% in 2011. Interestingly, on a like-for-like
retail category basis, Census Bureau figures put
the comparable 2012 Internet sales figure for the
US at just over 9.1%. Bearing in mind the minor
sub-category classification differences between
the Census Bureau and ONS surveys, the results
suggest that Internet sales as a proportion
of all sales in the UK and US remain level-
pegging, contradicting claims that Internet sales
penetration in the UK is unusually high.
On the current growth trajectory UK Internet
sales look set, with a fair-wind, to top-out at
about 14%-15% of total retail sales by 2020.
It is evident that the underlying reason for earlier
than expected slowing of Internet sales growth is
simply because the easy hit growth areas are now
all-but exhausted.
Rapid Internet sales growth to date has relied
almost entirely on capturing trade from just four
alignment will do the job for retailers anyway
but margin pressures will persist (hence the
continuing Internet-led attrition in these markets,
evidenced most recently by the failure of Comet
and Jessops).
Internet sales growth to date has also received
a very significant boost from online grocery
sales. Although only 3.11% of food store sales
were captured by the Internet in 2012, grocery
now accounts for just under 16% of total Internet
sales. Margin dilution however remains a major
obstruction in the way of future growth. Grocery
deliveries are still largely handled directly from
local stores. Not only do delivery costs have to
be paid for, but the costs attached to picking
out the items selected by customers have to be
covered too. Previously, the imputed cost of both
these activities was absorbed by the customer
(customers picked what they wanted from the
shelves and customers paid for the shopping
trip). Encouraging existing store customers to
become online customers turns the traditional
cost equation on its head, adding an entirely
new cost-layer. And that is emerging as a major
problem.
According to Shore Capital, ‘picking out all
your items, bagging them up and delivering each
order to your door actually costs supermarkets
£15 to £20 a trip – a far cry from the £5 usually
charged for the service’. Or, put another way,
store shoppers are subsidising online shoppers.
Whatever the short-term market share gains
might be, it is not a sustainable model long-
term, hence the sector-wide volte-face in favour
of click-and-collect and why the bulk of grocery
investment remains directed at store expansion,
not multi-channel. Multi-channel is clearly a
competitive necessity but it does not increase the
size of the retail cake.
Finally, the Internet received a significant
growth boost in its early years from electronically
transferable goods and services. The
overwhelming bulk of Internet trade in this area
is captured from services, not retailing however:
sub-sectors like banking, insurance, travel
related services, utilities, government (DVLA,
HMRC, etc.) indeed any activity where consumer
or business services can be transacted on the
Internet.
The most significant electronically transferable
retail trade captured by the Internet to date
has, predictably, been in downloadable goods:
music, film, software, e-books, etc. This growth
boost has however proved transient. As with non-
store sales, most of the electronically transferable
retail trade was captured by the Internet a long
while ago.
Space demand, to date, has not been
much affected by this highly-skewed Internet
penetration largely of just four retail sub-
sectors. Almost by definition, the capture by
the Internet of non-store sales is space demand
neutral. Online grocery sales growth has had
no measurable affect at all on grocery space
expansion (indeed, grocery space expansion has
accelerated in recent years, despite online sales
growth). The bulk of electronically transferable
retail trade was meanwhile captured by the end
of the last decade and is anyway far too small a
market to have a measurable impact on overall
retail space demand. The sole property area to
date to have been significantly impacted by the
Internet is bulky goods due to Internet induced
competition in branded-commodity markets.
Albeit even here, because much of the white
goods/brown goods trade has traditionally been
home-delivery, the impact has been a lot more
muted than originally expected.
The end result is that, despite the Internet,
sales space has continued growing in net terms
throughout the downturn: the oft predicted retail
space-fallout due to the Internet has just not
happened. Almost all the space-shakeout that
has occurred since the onset of the downturn is
due to recession, not the Internet.
The real fly-in-the-ointment for the Internet
is and will remain home delivery. Contrary to
popular perception, the home delivery business
has not had much of a boost from the Internet.
Home delivery growth rates – unlike click-and-
collect – have remained very sluggish over the
last decade. As a channel home delivery is not
nearly as scalable as it might first appear, not
least because little of the cost can be clawed back
from consumers (the reason for margin dilution).
The Internet has given the superficial impression
of rampant home delivery growth but that is only
because of the Internet’s cannibalisation of the
traditional home delivery business (particularly
mail-order). Now that most of that trade has
already been captured, the true margin-dilution
colours of home delivery are finally emerging.
In common with grocery markets – and for
identical margin dilution reasons – the primary
sector focus is click-and-collect, not home
delivery. And the thing about click-and-collect,
from the property perspective, is that it is space
demand neutral too: it simply reinforces the
migration of retailers from small markets to large
and from small units to large.
The outlook for retail property remains very
challenging, due to the downturn, but the Internet
is certainly not the villain of the piece.
MaRK TeaLeHead of Retail Research
Mark is responsible for UK retail research at CBRE. Mark’s research team tracks shopping pattern change throughout Great Britain via the NSLSP survey and linked research programmes. The results are widely used in the industry for measuring local demand change in shops markets and for forecasting.
THE INTERNET LEVIATHAN SLOWS Most of the low-hanging non-store and electronically transferable retail fruit was plucked by the Internet a long time ago. Due to logistical costs, capturing tangible goods sales profitably via multi-channel is proving more of an uphill struggle than retailers expected. on current growth trends, the Internet will top-out at 14%-15% of total retail sales in 2020, less than half the level of the more optimistic predictions of recent years. Mark Teale looks at what the declining rate of Internet sales growth means for retail space demand.
narrow retail sub-sectors, in order of importance:
1. non-store sales (traditional home delivery
business);
2. branded-commodities (largely electricals);
3. grocery goods;
4. electronically transferable goods.
By the end of 2012, fully 46% of UK Internet retail
sales had been captured from non-store markets
(mail-order, TV-shopping, traditional orderables,
etc.): i.e. the Internet’s rapid growth to date has
depended very heavily upon cannibalising the
traditional home delivery business. As over 66%
of non-store sales have already been captured
by the Internet the opportunity for the Internet
to secure further non-store sales is inevitably
dwindling fast (there is less than two percentage
points in sales left in play, a big chunk of which
will not transfer to the Internet).
The other big Internet growth area has been
branded commodities: electricals, photographic
etc. The reason for the marked success of the
Internet in penetrating branded commodity
markets is simply big-ticket price comparison by
consumers (shopping around for the cheapest
deals). Retailers have however begun to fight
back via own brand and/or varying warranty
terms in an attempt to make price comparison
in these markets more difficult. Ultimately price
Internet Sales
Home Delivery
300
250
200
150
100
50
02006 2007 2008 2009 2010 2011 2012
Inde
x 20
06 =
100
Source: Verdict
16 1702 03 04 05 06 07 08 09 10 11 12 13 14 15
Forecast
Total Retail Growth Total Online GrowthSource: Verdict
18.4
28.5
25.4
30.9
32.5
33.5
23.8
16.9
17.3
15.1
14.9
13.3
11.99.3
7.7 7.55.0 4.6 3.7
1.3 2.7 3.62.0
-0.41.6 0.9 1.0 1.9 2.5 2.7 2.8 2.8
Retail Sales Growth online vs all-Retail
home Delivery Sales vs Internet Sales
IN_retail_Spring_2013
41
17
d. Retailers capitalising on a heritage in home shopping.
4.5.15 In addition rapid Internet sales growth to date has relied almost entirely on capturing trade from just four
narrow retail subsectors in order of performance:
a. Non-‐store sales (traditional home delivery businesses).
b. Branded commodities (largely electricals).
c. Grocery goods.
d. Electronically transferable goods (Books, DVDs, Music).
4.5.16 As over 66% of non-‐store sales have already been captured by the Internet the opportunity for the Internet
is hardening.
4.5.17 Home delivery growth rates – unlike click-‐and-‐collect – have remained very sluggish over the last decade
while online grocery sales growth has had no measurable affect at all on grocery space expansion (indeed,
grocery space expansion has accelerated in recent years, despite online sales growth).
4.5.18 “Online retailing may increasingly be a necessary condition for market share growth, but it is not sufficient in
itself to drive good profitability” In_retail Spring 2013 (CBRE).
4.5.19 Bulky Goods has taken the most significant impact due to Internet induced competition in branded-‐
commodity markets. Natural lease breaks will result in existing capacity becoming available. It is unlikely
that any additional capacity could be delivered without impacting the vibrancy of existing parks, particularly
Park Tawe and therefore impacting the retail hierarchy. As growth remains muted any locations with strong
existing performance should be protected. Therefore any new bulky goods development in Swansea that
creates additional floorspace should not be supported unless they can illustrate a resurgence in demand (i.e.
a retail need) and prove that the City Centre retail core, existing retail hierarchy and current provision will
remain unaffected.
4.5.20 The bulk of electronically transferable retail trade was captured by the end of the last decade and is now far
too small a market to have a measurable impact on overall retail space demand.
4.5.21 The headlines hide the true impact of the internet. In most categories, between now and 2020 the big
18
change see an increase in genuine “multi-‐channel” customer journeys where more than one channel is used
to complete a single “pathway to purchase”. By 2020, the web will be playing some role in 68% of clothing
sales. Conversely, the store channel will still be playing a role in 65% of store sales.
4.5.22 Within the clothing sector the impact will be significant with “online only” growing from 10% in 2011 to 21%
by 2020 while multi-‐channel journeys (combining online and offline channels) will grow from just 16% in
2011 to 33% in 2020. John Lewis online sales accounted for 24% of total sales at its half year ending July
while and click-‐and-‐collect sales grew by 114% year on year. Over 60% of Directory returns are made
through Next stores, more than 20% of Directory parcel collections are made through Next stores and some
20% of new Directory customers are recruited in-‐store.
4.5.23 With the research element of the consumer purchase journey shifting more and more to online, face-‐to-‐face
consumer interaction becomes rarer, in turn making the in-‐store experience more important. This coupled
with Retailers’ over-‐emphasis on speed, convenience and price has led consumers to crave experience more
than ever.
4.5.24 The Four ‘C’s continue to represent significant barriers to pure internet growth:
a. Consistency – 55% of UK consumers say that clothes lack consistency between brands and retailers.
b. Comfort -‐ Mintel’s Buying for the Home Online UK February 2011 shows that 81% are more likely to
look in stores if they want to judge quality, colour or comfort.
c. Convenience – In Researching and Buying Technology Products UK January 2012, 43% of TV and 42% of
smartphone buyers say they want to test, experience and compare products in person before purchase
and stores continue to represent the only convenient opportunity for this.
d. Customer Service -‐ Service in online retailing is very primitive “faceless” and on the end of a phone
which customers find frustrating particularly in relation to complaints or product queries.
4.6 Often Forgotten Facts Impacting Retail Formats
4.6.1 The median age of the population is expected to rise from 39.7 in 2010 to 42.2 years by 2035 (Experian).
4.6.2 In 5 years time there will be half a million fewer teenagers and young adults in the UK (Experian).
4.6.3 In some areas half the residents will be over 60. Technology and ageing population is shifting demand to
19
local retail.
4.6.4 In 2012 53% of mobile users cannot download apps on to their phones (down from 69% in 2010).
4.6.5 61% of consumers prefer to pay by card rather than cash which means 39% of the market still pays by cash.
4.6.6 26% of UK shoppers will price check on their mobiles whilst shopping.
4.6.7 When it comes to recommendations people still turn to friends and family most often over the internet.
4.6.8 Over 50% of retailers do not have transactional websites yet – almost all have websites to browse.
20
5. The Swansea Perspective
5.1 A Summary of Facts and Figures
a) Swansea is classified as a Regional centre within NSLSP
b) UK Ranking based on proportion of shoppers out of over 3,000 locations 45
c) Resident catchment population (Survey 2013) 557,000
d) Resident catchment population (NSLSP) 356,874
I. ABC1 in catchment 47%
II. Under 25 years of Age in catchment 31%
III. 25 years of age to 45 years of age in catchment 24%
IV. Pre-‐family proportion in catchment 18%
V. Family Proportion in catchment 38%
VI. Proportion of Wealthy Achievers (Acorn) 24%
VII. Proportion of Urban Prosperity (Acorn) 4%
VIII. Proportion of Comfortably Off (Acorn) 31%
IX. Proportion of Moderate Means (Acorn) 18%
X. Proportion of Hard Pressed (Acorn) 23%
XI. Average Spend Non Food £47.75
XII. Average Grocery Spend £29.64
XIII. Avoid Swansea due to difficult / expensive parking 46%
XIV. Prefer to go to Retail parks 35%
e) Shopper Population (Core Catchment, NSLSP) 201,721
f) Shopper Population (Principle Catchment, Survey 2013) 238,000
g) Penetration (proportion of residents who use Swansea
as main Non food shopping destination) (Core Catchment, NSLSP) 57%
h) Penetration (proportion of residents who use Swansea
as main Non food shopping destination) (Principle Catchment, Survey 2013) 43%
i) Population growth (2020) 5%
j) Comparison Floorspace in the city centre (GOAD) 823,300
k) Total in town Comparison Floorspace estimated in town within 20 mins 1,105,700
l) Total Out of town Comparison Floorspace estimated
Out of town within 20 mins drive time 1,238,648
m) Out of Town % 53%
n) Zone A (Colliers 2012) £100
21
o) Online shopping penetration clothing and footwear (FSP) 7.3%
p) Vacancy Rate (LDC) 9%
q) Trading Gap £153m
r) Existing Shopper Gap £89m
22
6. Consumer Perspective from the Surveys
6.1 Swansea (i.e. the city centre) is the most frequently visited destination across the different surveys apart
from Mumbles -‐ issues with parking are the main factors discouraging shoppers from visiting more often.
6.2 However, average spend in Swansea is lower than the retail parks and other out-‐of-‐town shopping
destinations such as Cardiff, Bristol and McArthur Glen. Swansea is therefore not in effect getting the share
of spend it should be taking for a regional city.
6.3 Retail Parks are a major cause of leakage with the main pull being free parking and specific stores – such as
Tesco, Outfit and TK Maxx and around a third of respondents surveyed state they generally prefer shopping
in retail parks.
6.4 Of the shoppers surveyed in the retail parks and Mumbles, the Mumbles audiences are more negative about
Swansea and consider it poor in terms of its shopping offer – they also think the city has got worse in the last
5 years identifying the lack of destinational “appeal”.
6.5 There is a need for a wider variety of shops, particularly more upmarket stores and more independent
boutiques together with a stronger leisure offer.
6.6 Uniquely among the audiences surveyed Mumbles shoppers would also like to see more food-‐themed
events in Swansea, as opposed to shoppers in other surveys who would not be drawn to any additional
facilities. This is often the case when there is no longer an emotional attachment to the destination and
Swansea suffers from this. A large step change is required to attract people back in volume. More of the
same will not be appealing enough.
6.7 Out of the new shops tested, the ones that come out on top consistently across the different surveys are
House of Fraser and Mango reflecting the need for destination brands to deliver destinational appeal.
23
6.8 40% of Trostre shoppers are visiting a particular store – top ones are Outfit, Tesco and TK Maxx.
Convenience drives Retail Park footfall and to date the retail parks have failed to create the mixed leisure
and retail experience required to create stronger fashion and leisure parks. It must be emphasised any such
developments when coupled with free parking could cause an even larger degree of leakage from the city
centre and therefore hinder future development opportunities.
6.9 If they go to Swansea it’s usually for a particular item (47%) or for browsing (29%). Cities, particularly cities
at the heart of city regions need to have a higher proportion of browsers. The experience of being in the city
is almost as strong as the shopping itself. Swansea does not currently have that experience and a disjointed
retail and leisure core hinders the development of that experience.
6.10 Shoppers go to Swansea for non-‐food shopping 0.8 times a month on average – daytime eating stands at 0.5
times a month but all other purposes are below that figure. Their top stores in Swansea are M&S,
Debenhams and the Market. Frequencies have dropped nationally but this is below benchmark. Critically,
the markets role in potentially attracting visitors cannot be underestimated and creating a destination of
character is a real opportunity. The master plan must be ambitious enough and ensure the retail and leisure
core links effectively with the rest of the city centre and acts as an anchor for the city centre.
6.11 Shoppers tend to go to McArthur Glen (38%) more than Cardiff (30%) – 20% went to Cribbs Causeway in the
last 12 months.
6.12 Shoppers go to Trostre (0.92 monthly visits) slightly more often than to Swansea City Centre (0.86) – 35%
prefer going to retail parks but a combined 46% avoid Swansea due to difficult/expensive parking. For city
centres to thrive, particularly in car-‐based locations such as Swansea, parking penalises the city retail and
leisure offer. 24% of Trostre shoppers would not be swayed by any additional facilities in Swansea but a
combined 35% would like to see cheaper/easier parking in the City Centre. Parking charges should be at
retail park locations considered by the Welsh Government in order to protect the city centre and reinforce
the city centre first policy.
6.13 Mango, House of Fraser and Kurt Geiger would appeal to roughly 30% of respondents if they opened in
Swansea City Centre – however, most of these shoppers would be only slightly more likely to visit. Although
24
all are destination brands and all are reinforced in both focus groups and surveys in all locations, the
catchment demand more than just retail with cultural expansion required in the city combined with
destination dining. True destination planning delivering a day and night time economy and aimed at
capturing the combined opportunity from students, workers, residents and tourists is key. If the offer is
strong enough consumers will come back to the city despite parking charges and congestion.
6.14 Cribbs Causeway receives the highest non-‐food spend per visit (£82.65) followed by Culverhouse Cross and
Bristol City Centre, both around the £75 mark. Trostre has an average spend of £50.92 and Swansea is lower
at £47.75. Spend will come back to Swansea if the right offer is created. Pre St David’s Cardiff similar spend
levels were seen within the city.
6.15 In terms of spend on groceries, Trostre comes out top (£68.44) followed by Pontardulais Road Retail Park
(£63.51). Swansea lags behind with £29.64. Top up grocery (frequent weekly top ups rather than main
monthly shop) is potentially more significant in terms of opportunity rather than main grocery shopping as
consumers grocery habits shift.
6.16 For eating out, Bristol, Cardiff and Cribbs Causeway are the top places for average spend, all hovering around
the £20 mark. Swansea’s current offer does not integrate well with the city, particularly for the 35 plus
sections of the population and parking again creates challenges. Stronger integration with the waterfront
needs to be considered as it represents a strong potential tourism hub for visitors to the Gower Peninsula.
6.17 Swansea receives the top Net Promoter Score (84%) but Trostre is a close second (81%). Despite all the
negatives Swansea is still seen as a positive by those that utilise it. The challenge is that many may
recommend it but do not see the need to go themselves.
6.18 There is a need for more independent boutiques (18%) and upmarket stores (13%) whereas in terms of
leisure 87% do not indicate any additional facilities. Independents only become sustainable when linked to a
strong retail and leisure core. Retail core prime pitches will price them out of the market and yet retail core
prime pitches are a fundamental requirement for any development investment moving forward. Clearly
understanding the optimum trading location for independents is the key to successful sustainable
independent trade.
25
7. Consumer Perspective from the Focus Groups
7.1 Swansea City Centre suffers from an image problem – the high street in particular is depressing and its look
and feel is putting people off -‐ there is a feeling Swansea has lost its sense of pride.
7.2 Lack of variety is mentioned across all segments – there is a need for quality retailers and some segments
are particularly critical of increasing rates, which drives ‘good’ retailers out of town.
7.3 Respondents still visit the centre but the only reason for going are specific shops. Significant numbers do not
visit the City Centre as a destination as a whole, rather they visit individual destination stores such as such as
Debenhams and M&S.
7.4 The market is perceived to be a strong attraction and has the potential to create a strong appeal for both the
local catchment as well as Tourism and leisure visitors to the area, particularly if the aesthetic look improves.
7.5 Other locations such as Cardiff or Bristol provide a much more pleasant experience and are a day out -‐ unlike
Swansea.
7.6 On a more practical level, parking and a confusing road system are issues that keep shoppers from visiting.
Easier access and parking are critical factors that make respondents visit out of town retail parks. If the
development vision delivered is aspirational enough consumers will come despite parking and congestion
fears. The concern currently is that the city centre offer is currently too weak to warrant the cost.
7.7 In terms of leisure, Wind Street and the Marina are the main locations in town. Although younger segments
do come to Swansea more often the majority rarely visit and some only go during the day. There is a
perception that Swansea lacks entertainment for older age groups and also more upmarket places – Wind
Street has been taken over by youngsters and students which creates a perceived negative and aggressive
environment.
26
7.8 Adding more upper class, quieter venues to have a meal and drink would attract more respondents into
town -‐ unless this happens they will continue to feel intimidated by the current scene.
7.9 In addition out of town parking charges should be given due consideration in order to redress some of the
practical financial advantages of the out of town offer.
27
8. The Retailer Perspective 8.1 Swansea’s shopper population of 238k, drawn from a resident population of 557k, currently ranks the city
45th in the UK (source: NSLSP) and provides a shopper penetration (shoppers as a proportion of residents) of
43%.
8.2 Penetration is high compared to the ‘Regional’ centre average of 23%.
8.3 Low population densities, particularly outside the Primary Segment, mean Swansea has fewer residents and
shoppers than the ‘Regional’ centre average.
8.4 Competition is strongest from Parc Trostre/Llanelli, which jointly account for 16% of leakage, compared to
Neath (11%) and Cardiff (9%).
8.5 City centre highly pressured in recent years by out-‐of-‐town competition from Parc Fforestfach and Morfa
Shopping Park. Both have critical mass and offer high proportions of non-‐food goods (including clothing and
footwear) from attractive retail environments, reinforced by free parking. This is reflected in the sales
densities throughout the City.
Principal Catchment
April 4, 2013 FSP RETAIL BUSINESS CONSULTANTS 10
Source: FSP/CES
Shopper Penetration Map
April 4, 2013 FSP RETAIL BUSINESS CONSULTANTS 13
Source: FSP/CES
The map shows Swansea’s Catchment graded by shopper penetration – the proportion of residents that cite Swansea as their main non-food shopping destination.
The darker brown segment shows highest shopper penetration situated around the city centre and stretching to the North and West Shopper penetration is lowest around the periphery of the catchment, particularly to the North, an area of low population density Penetration is noticeably lower to the North West, around Parc Trostre, than in locations equidistant from the centre in other directions, highlighting the impact that Trostre has on the shopping preferences of residents in this area
28
8.6 Swansea City Centre demonstrates a Trading Gap (potential additional sales) of £153m, of which £89m can
be derived from shoppers already using the city centre.
City Centre Sales Density Plan
April 4, 2013 FSP RETAIL BUSINESS CONSULTANTS 30
Source: FSP
The plan shows Swansea City Centre sales density broken down into 7 zones. (NB. Parc Tawe is not included in the city centre sales in the Trading Gap analysis).
Excluding Tertiary Grocery, the Primary zone achieves the highest sales densities at £471/ft2 The Quadrant achieves a sales density of £412/ft2
2£412/ft2
1£471/ft2
3£341/ft2
3£341/ft2
4£380/ft2
6£1067/ft2
5 £339/ft2 7
£251/ft2
1 Primary 2 Primary - Quadrant3 Secondary4 Secondary - F&B5 Tertiary6 Tertiary - Grocery7 Parc Tawe
Trading Gap
April 4, 2013 FSP RETAIL BUSINESS CONSULTANTS 32
Source: FSP/CES
Market Share Gap – The level of additional turnover that could be achieved by increasing the proportion of spend of current shoppers to match that of shoppers in similar centres – would provide additional turnover of £89m turnover Shopper Gap – The value created by increasing shopper numbers from specific underperforming areas within the Swansea Catchment. It is worth £19m Catchment Gap – The value created if current shopper penetration across the catchment can be increased overall. At 43%, Swansea’s current penetration is high but other (similarly isolated) Regional centres are significantly higher. Using a short-term target of 55% penetration would provide additional turnover of £45m. A long-term target of 64% penetration would increase turnover by £91m
£89m
£19m
£45m
0
20
40
60
80
100
120
140
160
Trading Gap
Turn
over
Upl
ift (£
m)
Market Share Gap Shopper Gap Catchment Gap
Whilst attracting all resident catchment spend to Swansea is not achievable, the Trading Gap provides a realistic level of additional turnover which Swansea can attain. The Trading Gap consists of three elements: the Market Share Gap, the Shopper Gap and the Catchment Gap. FSP estimates the Trading Gap in Swansea to be worth an additional £153m.
Trading Gap By Merchandise Category
April 4, 2013 FSP RETAIL BUSINESS CONSULTANTS 34
41
13 21
-
14
9
3
3
2
2
21
7
8
4
5
0
10
20
30
40
50
60
70
80
Clothing andFootwear
PersonalGoods
HouseholdGoods
LeisureGoods
F&B
Turn
over
Upl
ift (£
m)
Market Share Gap Shopper Gap Catchment Gap
Source: FSP
29
8.7 This includes a gap of £41m in Clothing and Footwear (C&F) – comparatively high due to the relatively weak
city centre offer and lack of brands operating in the Assured (aspirational) Sector.
8.8 Adding new comparison good retail space of 200k-‐250k sq ft is most appropriate to increase overall city
centre performance and sales density. Whilst it may be physically possible to develop more space, this would
cannibalise sales from elsewhere within the city centre. The proposed city centre development will absorb
the full capacity.
8.9 An increase in gross retail space of 200k sq ft is likely to increase, by scheme maturity in 2021, shopper
population by 13%. A space increase of 250k sq ft would increase shopper population by 16% respectively
lifting Swansea to 39th or 36th in the UK.
8.10 Critical importance to the success of the proposed scheme for the St David’s Quadrant area is:
a. Inclusion of a fully integrated leisure offer (cinema/casual dining) into the scheme. Other forms of
leisure, such as a casino, may also be useful to extend shopping patterns and provide an all-‐day retail and
leisure destination
b. Seamless linkage between the new development and the Quadrant Centre, accompanied by
refurbishment/re-‐configuration of space to improve its trading effectiveness
8.11 Of critical importance to the success of the city centre is:
a. The delivery of the proposed city centre scheme for the St David’s / Quadrant area and the impact it will
have on the retail and leisure core as well as the wider catchment.
b. Identification of areas within the city centre where linkage with the new development can be improved –
Benchmark Trading Gap The chart shows Swansea’s Trading Gap compared against the Trading Gap of locations where FSP has recently studied with broadly similar shopper populations. These have been anonymised by showing the region and shopper population of the locations for data confidentiality.
The Trading Gap in Swansea is fairly substantial for its shopper population The Market Share Gap is typically the largest gap as its increasing spend from current shoppers rather than having to attract new shoppers
April 4, 2013 FSP RETAIL BUSINESS CONSULTANTS 37
Source: FSP/CES
£89m£103m
£78m
£36m£23m
£19m
£33m
£10m
£40m
£1.4m
£45m
£28m
0
20
40
60
80
100
120
140
160
180
Swasnea South East North East Sout West Scotland
Turn
over
Upl
ift (£
m)
Market Share Gap Shopper Gap Catchment Gap
238k Shopper Population: 226k 164k 284k 59k
30
reinforcing trading potential and reducing the threat of cannibalisation.
c. Creating and promoting unique selling points within zones of the city centre, such as the Market and
Theatre District, improving their sustainability and the overall city centre mix.
d. Recognition that any development at Parc Tawe should be focussed on the ‘bulky goods end of the market
and should exclude the addition of Clothing & Footwear. Whilst an increase in provision of household
goods will similarly reduce city centre potential, this is less crucial as such products are typically located out
of town.
9. Current Position of Key Projects 9.1 Given current retailer performance and the nature of retailer demand moving forward new development as
well as regeneration of the Quadrant will ensure maximum footfall and sales delivery. Discussions with
relevant private and public sector partners are continuing in this regard.
9.2 A Master plan has been has been developed for the city centre core area based on a phased approach to
development.
9.3 Within the city centre a fully developed retail core must have the ability to attract added value investment in
core areas. Confirmed and emerging regeneration projects within the City centre include the following
elements:
a. St David’s Quadrant area -‐ a retail led regeneration incorporating a complementary mix of uses
including significant leisure (A3 and D2 uses) and new large scale, high grade office use
b. Wind Street –pedestrianisation and environmental enhancement offering strong links to the core
city centre.
c. High Street – mixed use incorporating an element of speciality retail with a large residential area
including student accommodation.
d. Kingsway – an in town office park along with increased city living to bring jobs and vibrancy to the
city centre.
e. Alexandra Road/Mansel Street Corridor -‐ the “cultural quarter” should be developed with a focus
on strong connections to the core city centre.
31
f. Lower Oxford Street-‐ specialist retail area incorporating gateway features and targeted
improvements to key buildings featuring a development opportunity at the Oxford Street car park
that could support the Grand Theatre and the enhancement of the arcades.
g. Paxton Street/Civic Centre east car park – mixed use development opportunity that can serve to
improve linkages from the city to the sea, creating a new cultural leisure area that complements the
city centre.
9.4 A review of the SCCSF is to be commissioned that will refresh the ‘Regeneration Framework’ set out in the
document, and develop a new preferred framework that takes account of the changes in circumstance and
forces of influence that have affected implementation of its aims. The outputs of the commission will be
vital to ensure resources are appropriately targeted and re-‐focussed in order to maximise regeneration
benefits and ensure delivery of key development projects. This review, along with the council’s regeneration
programme bid to the Welsh Government for Vibrant and Viable Places funding will serve to guide priority
projects going forward.
32
10. The Planning Perspective 10.1 It is imperative that the new planning strategy for Swansea is both enabling of priority development
proposals and safeguards against schemes that would pose a threat to the future viability, vitality and attractiveness of the City centre core area. It is recommended that:
a. Retail centres are redefined across the administrative area and into four categories: ‘City Centre’,
‘District Centres’, ‘edge-‐of-‐centre (Parc Tawe)’, and finally ‘out of centre retail parks’. The out-‐of-‐
centre retail parks should be defined as being limited to: Parc Fforestfach, Pontardulais Road Retail
Park, Parc Morfa and Parc Cwmdu. The delineated boundaries of these retail parks should be
identified in the LDP and broadly follow the line of existing units at these locations.
b. City Centre ‘Retail Core’ is redefined as the City Centre ‘Retail and Leisure Core’ which will be the
priority location for high street A1 and A3 retail and D2 leisure, specifically a cinema should it
become appropriate to find a replacement site to allow the cinema site at Parc Tawe to be
redeveloped.
c. A new planning policy is formulated to clarify the roles of the key areas within the City Centre, which
complement the City Centre ‘Retail and Leisure Core’.
d. Removing Parc Fforestfach from the District Centre definition will ensure that it is considered as an
out-‐of-‐centre retail park
e. ‘Traditional District Centres’ in the UDP are redefined as ‘District Centres’ in the LDP.
f. The vision for the district centres across the county should be focussed on tourism, convenience
retail and leisure offers as appropriate, and ensuring that local high streets remain sustainable,
accessible and meet the needs of the less mobile sections of the population.
g. Parc Tawe is redefined in the LDP as an ‘Edge-‐of-‐Centre’ location where only bulky goods retailing is
permitted alongside appropriate leisure uses however the existing cinema use is best located in the
City Centre Retail and Leisure Core.
h. A quantitative assessment of retail provision, capacity and deficiency is undertaken as a separate
commission later in the LDP preparation process to provide the LDP with a robust, up-‐to-‐date
evidence base.
i. Supplementary guidance is prepared where appropriate to inform development for key individual
sites and sub-‐areas of the City Centre. This could include Development Briefs for the St
David’s/Quadrant area, as well as other complementary districts adjoining the City Centre Retail and
Leisure Core.
33
j. Further proliferation of unrestricted A1 retail space at out of centre and edge of centre retail
locations (including at Parc Tawe, Parc Fforestfach, Pontarddulais Road Retail Park, Parc Morfa, Parc
Cwmdu and the Enterprise Park) should be resisted as it poses a threat to the future vitality, viability
and attractiveness of Swansea City Centre. This threat applies to more than just proposed new
buildings for new retail space and includes proposed change of use of existing floorspace,
subdivision of premises to create smaller ‘high street’ scale units, variation of planning
conditions/legal agreements and proposed additional floorspace by means of mezzanine floors
K. The emergence of significant new leisure floorspace (including A3) that creates an enhanced dining and leisure destination at out of centre and edge of centre retail locations should also be resisted to prevent the emergence of an all round or multi-‐use destination that is more appropriately delivered within the city centre.
l. Planning policy should prevent a proliferation of further bulky goods floorspace where existing space
is available, since the evidence demonstrates it is unlikely additional bulky goods capacity could be
delivered without undermining the retail hierarchy. Future investment should be focused on existing
units at sequentially preferable locations.
m. Preparation of interim planning guidance which could take the form of Supplementary Planning
Guidance is a means of establishing greater planning controls over retail and leisure development
than is currently provided by the UDP. Significantly however, any new Supplementary Planning
Guidance cannot contradict policies set out in the UDP.
n. It will be important that such interim planning guidance directs large Class A3 food and drink
developments to the City Centre and where such sites are unavailable to alternative sequentially
preferable sites.
o. Prior to the adoption of the emerging LDP and any interim planning guidance, retail planning
applications must demonstrate consistency with the UDP and SCCSF and that they are appropriate in
sequential testing terms, that they will meet a quantitative and qualitative need and that they are
located on an accessible site.
p. In relation to specific planning applications we would recommend that specific catchment analysis,
deficiency analysis as well as impact assessments are made by prospective developers to ensure an
accurate reporting of potential impact at the time of the application and in respect of the specific
catchment of the development.
34
10.2 It is recommended that the following key objectives and principles form the cornerstone of the new retail
planning strategy for Swansea.
10.3 Objectives
a) Reinforce and improve the City Centre as a vibrant regional focus for business and administration, shopping,
culture and leisure;
b) Improve the range, choice and quality of shopping opportunities accessible for all sections of the community
and visitors to the area in accordance with a revised retail hierarchy; and
C) Strongly resist further out of centre/town retail development.
10.4 Key Principles
a) The primary focus for new retail, leisure, cultural, and business development should be the City Centre core.
b) The improvement and enhancement of District Centres should also be supported where this does not impact
on the regeneration of the City Centre.
c) New retail development that is best located within the City Centre or District Centres should not be
supported at out-‐of centre sites.
10.5 Retail Hierarchy
a) The City and County of Swansea’s retail hierarchy is defined as follows:
1. City Centre Retail and Leisure Core;
2. District Centres;
3. Edge-‐of-‐centre (Parc Tawe); and
4. Out-‐of-‐Centre Retail Parks
b) The District Centres are defined as: Clydach, Gorseinon, Killay, Morriston, Mumbles, Pontarddulais, Sketty
and Uplands.
c) The out-‐of-‐centre retail parks are defined as: Parc Fforestfach, Pontardulais Road Retail Park, Parc Morfa and
Parc Cwmdu.
d) The boundaries of the retail locations identified as being within the retail hierarchy should be annotated on
the LDP Proposals Map.
10.6 Retail Development Criteria
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a) The acceptability of all retail development proposals must be assessed against the need for the
development, where this is relevant to determination.
b) New retail development must demonstrate that:
1. The proposed site is the most sequentially preferable option;
2. There would be no material adverse impact upon the attractiveness, vitality and viability of the
City Centre and other established retail centres;
3. The proposal is compatible with the function, scale and character of the centre within or
adjacent to which the site is located;
4. The site is accessible by foot, bicycle, public transport and car; and
5. The scheme satisfactorily addresses design, environmental and highway considerations.
10.7 City Centre Sub Hierarchy
a) The City Centre is the Council’s priority location for retail and leisure development.
b) The retail sub-‐hierarchy within the City Centre should comprise the following in sequential order:
1. St. David’s/ Quadrant Site
2. Rest of Retail and Leisure Core
3. Complimentary City Centre districts
10.8 City Centre Retail and Leisure Core
a) Encourage new retail and leisure development that maintains and enhances the vitality, attractiveness and
viability of the City Centre Retail and Leisure Core as a regional retail and leisure destination
b) Highest priority should be placed on the provision of new retail and leisure facilities within the City Centre
Retail and Leisure Core. Development proposals that would be detrimental to objectives for the
enhancement of the Retail and Leisure Core should not be permitted.
c) Retailing (Class A1) is regarded as the most appropriate ground floor use within the primary shopping streets
of the City Centre Retail and Leisure Core. Proposals for the introduction of non-‐A1 uses at ground floor
level should have regard to:
1. The proposal’s relationship to other existing and proposed non-‐retail uses in the area,
2. The impact on the vitality, attractiveness and viability of the street,
3. The demand for retail premises in the area, and
4. The scale, design and impact of the proposal on the street scene.
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d) A revised, tightened ‘Retail and Leisure Core’ boundary should be annotated on the LDP Proposals Map,
informed by the findings of the report prepared by FSP.
10.9 District Centres
a) Within designated District Centres, development should be of an appropriate type and scale and maintain or
improve the range and quality of retailing facilities
b) Improvements to the physical environment and the accessibility of District Centres for public transport
users, cyclists and pedestrians should be encouraged, including maintaining appropriate levels of car parking
to serve such centres.
c) Retail development (A1/ A2/ A3) will be appropriate in District Centres where it:
d) Meets a local need,
e) Improves the overall vitality and viability of the District Centre, and
f) Causes no harm to the vitality and viability of the City Centre.
g) Development of non-‐retail uses within District Centres should only be considered where they can
demonstrate that they contribute to the vitality of the Centre.
10.10 Parc Tawe
a) Parc Tawe is an edge-‐of-‐centre retail location.
b) Only bulky goods retailing that would not compete with retailing within the City Centre Retail and Leisure
Core should be permitted at Parc Tawe.
c) There is significant potential to improve and enhance Plantasia as a complimentary destination to the City
Centre core.
d) Development at Parc Tawe should significantly enhance the frontage to The Strand and Quay Parade to
provide increased activity at street level and enhance linkages with the City Centre core and surrounding
area.
e) Any development at Parc Tawe should significantly enhance the gateway status of the location and improve
the sense of arrival to Swansea, through the use of good architecture, appropriate new buildings and public
realm enhancements. The complimentary nature of Parc Tawe to the City Centre core retail and leisure
experience will significantly enhance perceptions of the city centre
f) Development at Parc Tawe should improve its connectivity with and accessibility to the City Centre by foot
and by bicycle.
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g) Any development that is likely to have a detrimental impact on the City Centre Retail and Leisure Core or
that would be prejudicial to delivering regeneration at the St David’s/ Quadrant site should not be
permitted.
10.11 Other Retail Parks
a) Retail development should only be considered acceptable in the defined out-‐of-‐centre retail parks where:
1. It comprises the modernisation or replacement of existing retail floorspace;
2. It is for bulky goods retailing;
3. It meets the sequential test as defined in Planning Policy Wales; and
4. It does not impact on the proposed retail development in the City Centre Retail and Leisure
Core.
b) Leisure (D1) development should not be supported in the defined retail parks, unless it can be demonstrated
that no suitable sites or premises are viable either within the City Centre first, then District Centres or
appropriate edge-‐of-‐centre locations.
10.12 Bulky Goods Retail
a) There should be no net increase in retail sales floorspace for this sector unless clear evidence demonstrates
a quantitative demand (i.e. a retail need) exists.
b) Only in instances where an applicant can produce evidence that demonstrates a clear retail need for further
bulky goods retail space, and where no viable units or development sites are available at in-‐centre or edge of
centre locations, should out of centre locations be considered for further bulky goods floorspace.
c) The priority for bulky goods retail development should be the modernisation or replacement of existing
retail warehouses at the most sequentially preferable locations
10.13 Out-‐of-‐Centre Retail Development
a) Non-‐bulky comparison retail and leisure development at out-‐of-‐centre locations not defined in the retail hierarchy should be strongly resisted, except for:
b) Small scale retail development in local communities required to meet local needs; and
c) Units requiring large showrooms and/or display areas such as the sale of caravans and motor vehicles.
d) Within the Enterprise Park, proposals for new additional or replacement retail and/ or leisure floorspace
should not be permitted.
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10.14 St. David’s/ Quadrant Area a) The St David’s/Quadrant area in the City Centre Retail and Leisure Core is the area of highest priority for retail
and leisure development in the whole of the administrative area.
b) A comprehensive retail-‐led mixed-‐use regeneration scheme should be brought forward for this area in the short
to medium term in order to deliver the necessary revitalisation of the Retail and Leisure Core and to enhance the
attraction of the City Centre as a regional shopping retail and leisure destination. The following uses will be
suitable in this location:
1. High street A1 retail uses,
2. A3 restaurant uses,
3. D2 leisure uses, including a new cinema, and
4. Other appropriate complementary uses
c) Development proposals that would put at risk the comprehensive retail and leisure led regeneration of St
David’s/Quadrant area, or would adversely affect the potential to enhance and redevelop retail facilities
elsewhere within the Retail and Leisure Core, should not be supported.
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11. Conclusions 11.1 Swansea City Centre is currently failing in both its retail and leisure offer with poorly configured retail space,
lack of complementary leisure opportunities, dated environment and relatively weak tenant profile for what
is Wales’ second City.
11.2 More importantly however, Swansea City Centre has a catchment capable of supporting a regionally
dominant leisure and retail scheme in keeping with the needs of a city region. In order to capitalise on this
opportunity, delivering a significantly enhanced level of performance and a regionally dominant scheme of
this nature, there are a number of key challenges that need to be addressed:
11.3 Sector Context
a) The power player in the development of retail space is now the retailer. Supply outstrips demand as
portfolios are stripped of weak, underperforming space through natural lease expiries and breaks. The
ability to provide prime space in the right place, easily accessible both in town and out of town is now a
priority for councils and protecting and enhancing town centres is critical to future success as consumers
seek out “destinations” capable of delivering an experience above and beyond the simple retail offer.
b) In the short term, while the development pipeline improves, retail parks offer retailers flexible, affordable
space, perfectly suited to the retailers’ current need to “play” with changing integrated formats. Balancing
this with the need to retain catchment spend through thriving town centres may lead to the need to make
difficult and politically unpopular planning decisions. The Council and the Welsh Government must
therefore ensure all future development opportunities are considered in light of the strategic implication for
the City Region as a whole.
c) Retailers are “globalising, digitising, polarising” with integrated retail models combining on and off line
channels. Format, adjacencies and rental sustainability are the cornerstones to their leasing strategies
moving forward. In this context optimising the retail space in Swansea will require both new development as
well as refurbishment of existing assets.
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11.4 The Catchment Perspective
a) They view Swansea City Centre as tired, dated and declining with an average offer coupled with a complex
traffic system, congestion and poor / expensive car parking.
b) Swansea is therefore a single-‐use destination for the majority of the mobile catchment with a tendency to
shop either at M&S, Debenhams or the indoor market rather than the city centre offer as a whole.
c) Doing nothing is not an option given out-‐of-‐town demand will continue to provide incentives for developers
to continue to invest and develop competing offers to the city centre increasing leakage and potentially
creating higher void rates within the city.
d) Major national multiples have a strong presence within the out of town retail parks. As such national
multiples alone will not deliver a return to the city centre. A destination is required that combines leisure
with retail and a department store.
e) The Leisure offer in particular needs to improve, catering for an older and more affluent sector of the
catchment. Wind Street provides a venue for the younger generations and has strong appeal with this
sector however the city needs to add to this with a more aspirational offer. This offer should look to serve
the tourism market as well as the leisure market and needs to be integrated into the retail core with linkages
to the waterfront and Swansea Bay.
f) From a pure leisure perspective the catchment requires a leisure anchor in order to support the
development of the city centre night-‐time economy.
g) Linkages to Swansea Market are key as is the look and feel of this venue. The market has the potential to
provide a second anchor to a newly developed scheme if its excellence in food is maintained. A strong
master plan is required to ensure the market delivers against its true potential.
h) The ‘complementary districts’ within the city centre and the District Centres throughout the wider county
will only thrive once Swansea’s retail and leisure core is developed.
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11.5 The Retailer Perspective a) There is a significant trading gap available within the catchment that creates an attractive investment
opportunity.
b) The current sales densities being delivered within the city centre do not reflect the trading gap available.
This is due to the quality of space available. As a result any development plans not only need to deliver new
prime space but also provide redeveloped space within The Quadrant Centre.
c) The level of investment return required demands both a strong retail as well as leisure anchor. Small format
department stores and a cinema should represent core parts of the vision. Retail alone is unlikely to deliver
the strength of late night trading required to support more aspirational retail formats. Aspirational catering
requires a strong leisure anchor to support late night trade and realistically retailers will only consider a
cinema as a feasible operator
d) A strong case will need to be presented that clearly lays out the trading gap potential but also the
partnership approach being offered by the council. A detailed cost benefit analysis of key positioning
lettings (including potential for additional financial support from the council) should also be considered.
11.6 The Planning Perspective
a) Swansea policy needs to protect the regeneration of the city centre core from both a retail, leisure and office
space capacity, ensuring that the city centre first approach is delivered in full.
b) Current planning policy will need strengthening in key areas if the ambition of the City from both a retail and
leisure perspective is to be delivered.
c) The current retail capacity available to the city centre core pertains to the whole catchment and is equal to
the proposed scale of development at the St David’s / Quadrant site. Any changes to existing retail capacity
will impact on the available spend from the catchment and therefore the sustainability of the proposed retail
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and leisure development.
d) Due to the need to protect the city centre first approach, and in light of the estimated retail floorpsace
capacity remaining within the catchment, it is recommended that any application for further A1 retailing at
retail parks and out of centre locations including proposed change of use, subdivision, variation of planning
conditions/legal agreements and additional floorspace at existing units (such as proposed mezzanine floors)
should be refused in order ensure that this space does not cannibalise both footfall and spend within the
proposed retail and leisure core.
e) Due to the potential comparison goods impact of large format grocery outlets future food store
development should ensure strategically located convenient offers within district centre high streets
ensuring their high streets have the footfall required to sustain a localised catchment.
f) Given the increasing pressure on bulky good space (versus alternative formats) there is clear evidence that
within existing units at retail parks, particularly at Parc Tawe where there are a number of existing vacancies,
any capacity will be swallowed up. As a result any further consent given for new build at out of centre
locations will reduce the viability for sequentially preferable sites in line with the retail hierarchy such as Parc
Tawe.
g) Leakage to the retail parks from the city centre is significant. Their appeal is primarily retail. However,
planning applications that increase the volume or quality of retail parks through the addition of destination
dining will increase competition for spend within the catchment and potentially jeopardise the sustainability
of the city centre retail and leisure core. Both the City Council and the Welsh Assembly must focus on
protecting the retail and leisure core of the city region and look to refuse any future applications that seek to
create such competition.
h) Trostre in particular represents a significant point of leakage and as such policy outside the boundary of the
county must protect the heart of the city region status of Swansea and ensure a Swansea first approach is
taken by both the City Council and the Welsh Assembly.
i) In relation to specific planning applications we would recommend that specific catchment analysis,
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deficiency analysis as well as impact assessments are made by prospective developers to ensure an accurate
reporting of potential impact at the time of the application and in respect of the specific catchment of the
development.
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