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Retail Construction and Refurbishment Market Report - UK 2015-2019 Analysis

Published: 26/11/2015 / Number of Pages: 89 / Price: £795.00

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Introduction and Overview

AMA Research have published the 4th edition of the 'Retail Construction and Refurbishment Market Report - UK 2015-2019 Analysis'. The report focuses on key trends, challenges and opportunities facing the retail industry, which should be of particular interest to retailers, supply chains and construction professionals involved in the commercial retail sector.

Key issues covered:

  • Current and future strategies of major grocery groups - current and projected store portfolios.
  • Analysis of the non-food multiples and major department store chains, together with current and projected store portfolios.
  • Detailed assessment of retail new build construction output and RMI and shopfitting, together with opportunities and forecasts for growth over the next few years.
  • Construction supply in the retail sector - key construction companies, contractors and shopfitters, contractor profiles; leading developers and current property portfolios and development plans.

Key areas of insight include:

  • Key drivers of change in the retail sector - including areas such as convenience and online - key areas of opportunity for contractors.
  • Rise in online shopping and changes of strategy of major supermarkets/discounters - impact on retail construction, with lower value contracts now a key feature of the market.
  • Era of the "space race" to open large supermarkets has now come to an end - focus now on convenience stores and infrastructure to support online services.
  • Trend among retailers to make the most of existing stores through refurbishment and refreshing existing portfolios rather than adding new space.
  • Analysis of key issues affecting the retail sector including the planning system and change of use legislation as they affect retail development; growing importance of sustainability, and growth of smart-phone and application technology.

Some of the companies included:

BAM Construction, Bowmer & Kirkland, Havelock Europa, Interior Services Group plc (ISG), Kier, Mace, McLaren Group, McLaughlin & Harvey, Midas Group, Morris and Spottiswood, Simons Group, Styles & Wood, Vinci, Wates Group.

Retail Market in the UK

  • Market overview and size - Retail sales and consumer spending, impact of economy on the retail market.
  • Grocery market - Overview, structure and size - leading supermarket chains and superstores market shares, convenience, discount, online -sector size 2014/15, forecasts 2019/20 etc.
  • Non-Food retail market - Overview, structure and size - leading non-food retailers, chains and department stores.
  • Out of town warehousing & retail parks.
  • Retail warehouse development Pipeline (Million sq. ft) 2008 - 2015.

Retail Construction & Refurbishment in the UK

  • Construction output in retail sector - outlook up to 2019.
  • Shopfitting market in the UK - market size 2009-15, recent trends, forecasts 2015-2019.
  • Building Programmes in the retail sector - share by sector - shopping centres, retail parks, supermarkets 2008-15 (M. sq.ft). Retail space under construction in key sectors
  • Building Programmes & Expansion Plans of the major Supermarkets, Discounters - range of schemes, scale of roll-out programmes, Capex, New Store Portfolios, framework contractors etc.
  • Building Programmes & Expansion Plans of Non-Food Retailers - key players - New Store Portfolios, market opportunities etc.
  • Shopping Centre Development - Development Pipeline 2015 (m sq. ft.) - New Space and Remodelled Space, Space proposed, consented and under construction.
  • Major shopping centre schemes - project, size, capital values, developers, completion dates
  • Retail-Led Regeneration & Mixed-use Development - Top Retail-led Regeneration Schemes in the UK - Capital Value, Size, Main Developer, Completion Date.

Factors Affecting Retail Construction

  • Planning Developments, Sustainable Construction in the Retail Sector.
  • Analysis of PPS4. National Planning Policy Framework, Change of Use Legislation.
  • Review of the Portas and Grimsey Reviews of the high street.
  • The 'Big Four' Supermarkets - Land and Planning Issues.
  • Online Retailing - Online Sales for Leading Multi-Channel Retailers 2014 - impact on space requirements in the medium term, key sectors affected etc.

Construction Supply in the Retail Sector

  • Key Construction Companies, Contractors and Shopfitters in the Retail Sector - top UK Retail Contractors by Turnover and Key Retail Clients 2014/15.
  • Contractor Profiles - BAM, Barr Construction, Bowmer & Kirkland, Interserve, ISG, Kier, Mace, McLaren Construction, Midas, Simons, Styles & Wood, VINCI and Wates Retail.
  • Major Shopfitting Companies - Leading 20 - turnover and Key Clients.
  • Impact of changing retail strategies on future workloads and contracts.
  • Leading Developers, Investors in the Retail Sector - current property portfolios 2015, Major Projects, Future Investments and Development Plans.

Report Summary

Total UK retail sales have been boosted by an increase in online sales in recent years and the industry has performed strongly to date in 2015, with food sales generally buoyant. In addition, returning consumer confidence has underpinned increasing big ticket, non-essential purchases. Retail construction output saw a return to growth in 2013 driven by a slight uplift in consumer confidence, followed by a 2% increase in 2014 as positive factors such as low inflation and interest rates, rising real incomes and positive house price growth continued to support the market.

Retail construction, whilst challenging for the contractor and offering slim margins, does offer repeated high volumes of work, especially in the grocery sector. Sectors such as food retail where capital expenditure has remained relatively strong so far have been areas offering opportunities for contractors throughout the downturn, which helped to maintain order books and work pipelines. However, the retail market continues to be driven by structural changes due to the growth of online shopping. Profit margins for traditional retailers continue to be squeezed by non-store and online sales, rapidly changing consumer habits and intense competition from discounters such as Aldi and Lidl.

Whilst retail contractors are set to see more work coming through in 2016, the value and size of projects have changed with an emphasis on smaller refurbishment, particularly for the convenience and discount sectors in urban locations. Store rationalisation by many of the largest grocery and non-food chains looks likely to continue, with non-food retailers in particular focusing on major national hubs in shopping centres and out-of-town retail parks. This trend has led to an imbalance between demand and availability for prime retail space, a situation that is likely to remain due to the lack of new developments. A return to increasing real wages and consumer spending growth is expected to continue to support retail sector recovery and a gradual increase in demand for shopfitting services and a rolling out of wider store refurbishment programmes by retailers.

The extent and speed of the recovery for retail will remain heavily dependent upon the levels of consumer confidence and spending and, given these positive economic factors which have continued into 2015, current forecasts indicate total annual output increases of between 3-4% to 2019. Into the medium-term, the retail sector is facing significant structural changes with the continuing growth of internet shopping likely to increase demand for warehousing space to service this growth but also declining demand for traditional retail outlets, particularly in high street locations. However, the retail sector faces significant structural changes as consumers are increasingly forecast to employ different shopping methods such as online home delivery, as well as click and collect. This means that a significant proportion of investment for the retail sector is likely to be in warehousing and distribution centres to service these new shopping methods.


List of Report Contents

  1. Contents Listing
  2. 1. INTRODUCTION 6
  3. 1.2 SOURCES OF INFORMATION 6
  4. 2. SUMMARY AND FUTURE PROSPECTS 8
  5. 2.1 SUMMARY 8
  6. 2.2 FUTURE PROSPECTS 10
  7. 3. ECONOMIC ENVIRONMENT UPDATED 01/10/15 11
  8. 3.1 GDP 11
  9. 3.2 INFLATION & INTEREST RATES 12
  10. 3.3 UNEMPLOYMENT 13
  11. 3.4 HOUSEHOLD CONSUMPTION 14
  12. 3.5 HOUSING & CONSTRUCTION 14
  13. 3.6 STERLING 15
  14. 3.7 POPULATION PROFILE 16
  15. 3.8 CONCLUSIONS 16
  16. 4. RETAIL CONSTRUCTION AND REFURBISHMENT 18
  17. 4.1 NON-RESIDENTIAL CONSTRUCTION OUTPUT 18
  18. 4.1.1 Non-Residential Construction Output by Sector 19
  19. 4.2 RETAIL CONSTRUCTION MARKET 23
  20. 4.2.1 Construction Output in the Retail Sector 23
  21. 4.2.2 Shopfitting Market in the UK 24
  22. 4.3 BUILDING PROGRAMMES IN THE RETAIL SECTOR 26
  23. 4.3.1 Overview 26
  24. 4.3.2 Retail Development Pipeline 27
  25. 4.3.3 Grocery Retail Development Pipeline 29
  26. 4.3.4 Building Programmes and Expansion Plans Leading Retailers 32
  27. 4.4 SHOPPING CENTRE DEVELOPMENT 35
  28. 5. ISSUES AFFECTING RETAIL CONSTRUCTION 38
  29. 5.1 OVERVIEW 38
  30. 5.2 PLANNING ISSUES 38
  31. 5.2.1 National Planning Policy Framework 39
  32. 5.2.2 Change of Use Legislation 40
  33. 5.2.3 The Grimsey and Portas Reviews 41
  34. 5.3 LAND AND PLANNING ISSUES - THE "BIG FOUR" SUPERMARKETS 42
  35. 5.4 SUSTAINABLE CONSTRUCTION IN THE RETAIL SECTOR 43
  36. 5.4.1 Retailer Progress on Reducing Carbon Emissions 43
  37. 5.4.2 BREEAM Rating for Retail 45
  38. 5.5 ONLINE RETAILING 46
  39. 6. THE RETAIL MARKET IN THE UK 49
  40. 6.1 MARKET OVERVIEW AND SIZE 49
  41. 6.2 RETAIL SALES AND CONSUMER SPENDING 50
  42. 6.2.1 Impact of the downturn on the Retail Sector 51
  43. 6.2.2 2015 Budget 52
  44. 6.3 THE GROCERY MARKET 53
  45. 6.3.1 Overview and Market Size 53
  46. 6.3.2 Structure of the UK Grocery Market 54
  47. 6.3.3 Leading Supermarket Chains and Superstores 56
  48. 6.3.4 Convenience Retailing 66
  49. 6.3.5 Discount/Value Retailing 68
  50. 6.4 NON-FOOD RETAILING 71
  51. 6.4.1 Clothing & Footwear 72
  52. 6.4.2 Electrical Appliances and Consumer Electronics 73
  53. 6.4.3 DIY and Hardware 73
  54. 6.4.4 Furniture and Furnishings 74
  55. 6.4.5 Leading Non-Food Retailers, Chains and Department Stores 74
  56. 6.5 OUT OF TOWN RETAIL PARKS/RETAIL WAREHOUSE CONSTRUCTION 75
  57. 7. CONSTRUCTION SUPPLY IN THE RETAIL SECTOR 77
  58. 7.1 OVERVIEW 77
  59. 7.2 RETAIL CONSTRUCTION SUPPLY CHAINS 78
  60. 7.2.1 Tesco 78
  61. 7.2.2 ASDA 78
  62. 7.2.3 Sainsbury's 78
  63. 7.2.4 Morrisons 78
  64. 7.2.5 Waitrose 79
  65. 7.2.6 Lidl 79
  66. 7.2.7 Aldi 79
  67. 7.2.8 The Co-operative 79
  68. 7.3 KEY CONSTRUCTION COMPANIES AND CONTRACTORS IN THE RETAIL SECTOR 79
  69. 7.4 COMPANY PROFILES 82
  70. 7.5 LEADING SHOPFITTING COMPANIES 86
  71. 7.6 LEADING DEVELOPERS IN THE RETAIL SECTOR 88
  1. Tables & Charts
  2. CHART 1 RETAIL CONSTRUCTION OUTPUT (GB) NEW WORK ANALYSIS 2009 TO 2019 - BY VALUE (£BN AT CURRENT PRICES) 8
  3. TABLE 2 GDP DATA - 2012-2015 - KEY CONSTITUENT ELEMENTS 11
  4. CHART 3 INTEREST RATES AND INFLATION (CPI) FROM 2000-2019 13
  5. CHART 4 PDI & SAVINGS RATIO AT CURRENT PRICES 2000-2019 14
  6. TABLE 5 EXCHANGE RATE FLUCTUATIONS 2010-2016 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 16
  7. CHART 6 NON-RESIDENTIAL CONSTRUCTION OUTPUT (GB) NEW WORK AND RMI ANALYSIS 2009 TO 2019 - BY VALUE (£BN AT CURRENT PRICES) 18
  8. CHART 7 NON-RESIDENTIAL CONSTRUCTION OUTPUT (NEW WORK) ANALYSIS BY SECTOR 2014 - % BY VALUE 20
  9. CHART 8 RETAIL CONSTRUCTION OUTPUT (GB) NEW WORK ANALYSIS 2009 TO 2019 - BY VALUE (£BN AT CURRENT PRICES) 23
  10. CHART 9 UK SHOPFITTING MARKET - BY VALUE 2009 - 2019 (£BN MSP) 25
  11. CHART 10 UK RETAIL SPACE UNDER CONSTRUCTION (SHOPPING CENTRES, RETAIL PARKS AND SUPERMARKETS) 2009 TO 2015 - BY AREA (MILLION SQUARE FEET) 28
  12. CHART 11 UK PIPELINE FOR GROCERY R ETAIL SPACE (PROPOSED, WITH CONSENT AND UNDER CONSTRUCTION) 2009 TO 2015 - BY AREA (MILLION SQUARE FEET) 30
  13. TABLE 12 MAJOR RETAIL DEVELOPMENT PLANS/CONSTRUCTION SCHEMES FOR THE NON-GROCERY RETAIL AND DISCOUNT RETAIL SECTORS 34
  14. CHART 13 UK SHOPPING CENTRE DEVELOPMENT PIPELINE (PROPOSED/CONSENTED AND UNDER CONSTRUCTION) 2014 AND 2015 - BY AREA (M SQ FT) 36
  15. TABLE 14 UK PIPELINE FOR MAJOR SHOPPING CENTRE SCHEMES CURRENTLY UNDER DEVELOPMENT 37
  16. CHART 15 ONLINE SALES REVENUES FOR E-TAILERS AND MULTI-CHANNEL RETAILERS IN 2015 - BY VALUE (£BN) 47
  17. CHART 16 UK RETAIL MARKET NUMBER OF OUTLETS 2006-07 TO 2013-14 49
  18. TABLE 17 UK RETAIL MARKET TURNOVER GROWTH 2009 TO 2019 - BY VALUE (RETAIL TURNOVER £BN) 50
  19. CHART 18 UK GROCERY MARKET 2009-10 TO 2019-20 - BY VALUE (£BN) 53
  20. TABLE 19 UK GROCERY MARKET SECTOR ANALYSIS (TURNOVER SIZE AND MARKET SHARE) 2014-15 AND FORECAST 2019-20 - BY VALUE (£BN) AND % 55
  21. CHART 20 UK GROCERY MARKET MAJOR MULTIPLES SHARES SEPTEMBER 2015 - % 56
  22. CHART 21 THE BIG FOUR SUPERMARKETS KEY UK FINANCIAL PERFORMANCE 2009 TO 2 015 - SALES (£BN) 57
  23. TABLE 22 TESCO - UK STORE PORTFOLIO 2013 TO 2015 WITH FORECAST FOR 2016 - BY NUMBER OF STORES AND FLOORSPACE ('000 SQ FT) 59
  24. TABLE 23 ASDA UK STORE PORTFOLIO AT APRIL 2015 - NUMBER OF OUTLETS BY STORE FORMAT (2013-15) 60
  25. TABLE 24 J SAINSBURY UK STORE PORTFOLIO AT JULY 2015 - NUMBER OF OUTLETS BY STORE FORMAT (2013-15) 61
  26. TABLE 25 WM MORRISON UK STORE PORTFOLIO AT JULY 2015 - NUMBER OF OUTLETS BY STORE FORMAT (2013-15) 63
  27. TABLE 26 OTHER MAJOR SUPERMARKET CHAINS IN THE UK 2015 - NUMBER OF OUTLETS, MARKET SHARE AND TURNOVER (£BN) 64
  28. CHART 27 UK CONVENIENCE SECTOR BY FORMAT 2015 - NUMBER OF OUTLETS AND VALUE 67
  29. TABLE 28 LARGEST DISCOUNT STORE ORGANISATIONS IN THE UK 2015 - STORE PORTFOLIOS AND TURNOVER (£BN) 69
  30. CHART 29 UK NON-FOOD RETAILING SECTOR SHARE ANALYSIS 2015 - % 71
  31. TABLE 30 UK NON-FOOD RETAIL SECTOR LEADING ORGANISATIONS - NUMBER OF OUTLETS AND UK TURNOVER(£BN) 75
  32. CHART 31 RETAIL WAREHOUSE DEVELOPMENT PIPELINE (PROPOSED, WITH CONSENT, UNDER CONSTRUCTION AND TOTAL PIPELINE) 2011 TO 2015 - BY AREA(MILLION SQUARE FEET) 76
  33. TABLE 32 UK RETAIL MARKET TOP CONTRACTORS BY VALUE OF PROJECTS (£40M+) 2014 TO 2015 80
  34. TABLE 33 UK RETAIL MARKET TOP CONTRACTORS BY VALUE OF PROJECTS (UP TO £40M) 2014 TO 2015 81
  35. TABLE 34 UK SHOPITTING LEADING ORGANISTIONS2014-15 - BY SALES AND KEY CLIENTS 87
  36. TABLE 35 LEADING RETAIL DEVELOPERS IN THE UK - CURRENT PROPERTY PORTFOLIOS 2015, MAJOR PROJECTS, FUTURE INVESTMENTS AND DEVELOPMENT PLANS 89

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