For retail property landlords York is an uplifting place to be this month.
On the outskirts of the city, the new Vangarde Shopping Park has opened, with three of the country’s most significant retailers — Next, Marks & Spencer (M&S) and John Lewis.
On its own, the 330,000 sq ft centre is a notable retail development in a sparse year for new shopping centres and retail parks. But for the retailers themselves, the development is even more important.
Next has opened the latest of its large department store-style concept stores, which it is gradually rolling out across the country. These stores are scheduled to account for 40% of the company’s new space over the next few years and represent the evolution of Next from a high-street clothing retailer into a fully-fledged brand across fashion and home. Sales figures from the company — which reported a 5% increase in sales in the year to the end of January — suggest this strategy is working.
Alongside Next is the biggest M&S to open in the UK since the flagship store at Cheshire Oaks in August 2012. The M&S is not only notable for its size, but its layout too. With the company’s general merchandise offer in a state of flux, new stores offer an up-to-date insight into how the 130-year-old retailer sees its place in the modern retail environment.
With chief executive Marc Bolland pledging to stop opening non-food space in the UK and Clem Constantine, the company’s respected property director, departing, new M&S stores of this scale are going to become increasingly rare.
However, the M&S management is clearly impressed with the new store layout — which includes a more sparse and edited look in non-food - similar to the company’s impressive overseas stores - a beauty hall, and a deli and bakery in food.
As a result, a major part of the company’s strategy over the next three years could be a store refurbishment programme. Bolland, who is due to unveil the next stage of his strategy in May, talked enthusiastically about the York store when unveiling a trading update last week and hinted at store revamps.
“The encouragement is that we [now] know exactly what to do and how to do it,” he explained.
But despite the upbeat tone of the M&S boss, it was the £15m and 95,000 sq ft John Lewis store that attracted the biggest queue on the opening day of the Vangarde park.
The York shop is the only John Lewis department store to open in 2014, and it is the first time in 75 years that the retailer has opened in Yorkshire.
While John Lewis may have far fewer shops than Next and M&S, managing director Andy Street is one of the most enthusiastic supporters of physical retailing in the 21st century industry.
The fact that John Lewis chose to open out-of-town in York after failing to find a suitable location in the city centre — which is still the retailer’s favoured location — shows how keen the department store is to expand itsfootprint.
York is John Lewis’s 41st store, but Street wants to grow to 65 stores over the next decade. That includes agreed stores at Westfield London as well as Leeds, Birmingham and Oxford. But the retailer is also looking for deals to fill its obvious geographical holes in the UK, including Croydon, Guildford, Belfast and Manchester city centre.
The growth of johnlewis.com has been impressive, with 30% of the retailer’s sales now coming from online. However, John Lewis performs better online in areas where it has stores. This is because, as Street says, a John Lewis department store boosts brand awareness in the catchment area and offers a collection point for orders.
It is this statistic that prompts Street to insist that retailers with stores and an online business will eventually beat those with only a website. For John Lewis — as well as Next and M&S — the regional flagship store is more important than ever.
Graham Ruddick is retail correspondent at the Daily Telegraph