Sales falling but developers push on

Jan 5 2008 by Henryk Zientek, Huddersfield Daily Examiner

RETAILERS left reeling by falling sales are set to face more trading problems in 2008, a property expert has warned.

Jonathan Newns, head of the in-town retail team at King Sturge in Yorkshire, said a combination of factors affecting consumer confidence had hit Christmas trading for many leading stores.

He said: “Many retailers tried to rescue the year-end sales figures with early, aggressive cuts in the sales – but even this does not appeared to have uncovered a silver lining in the dark Christmas cloud.

“The problems arose because a number of factors affecting consumer confidence all came at once, including rising oil and petrol prices, the Northern Rock crisis, the credit crunch, falling property prices and the end of a large proportion of fixed-rate mortgages.

“The Bank of England tried to ease the load by lowering the base rate just before Christmas, but this was too late and should have been done in November when retailers were trying to boost trade.”

Mr Newns, a partner at King Sturge – which markets several major shopping centres, including Kingsgate in Huddersfield – said this year’s trading figures were already below par for several top retailers while trade was expected to remain difficult in 2008.

He said sports retailers were concerned that a large proportion of their trade would be hit by the England football team failing to qualify for the European Championship.

There were likely to be successes for supermarkets and online retailers – while further interest rate cuts could trigger an upturn later in the year.

But Mr Newns said: “It is likely to be 2009 before there is a sustainable recovery in retail trade.

“The end of 2007 was so tough, with so many conflicting factors, that we are unlikely to see light at the end of the tunnel until early next year.”

But Mr Newns predicted healthy interest in well-designed and well-placed shop units.

“Mainstream retailers – while cautious – will continue to seek suitable units, becoming more specific about their requirements. There is likely to be continued demand for well-placed prime units and developers will continue to push forward with plans.

“Many new shopping centre schemes are due to come on stream after 2010 and this is likely to boost high street trade,” he claimed.

Mr Newns said the proposed second phase of Kingsgate – along with new shopping developments in Leeds, Wakefield and Barnsley – would all have a role to play in boosting the retail sector.