Creatures of leisure
Consumers are increasingly shifting their expenditure from shopping to socialising, posing a big challenge for landlords and retailers. Most retail destinations, such as shopping centres, were not built with a mixed-use purpose in mind. While many have added cafés and restaurants to their mix in recent years, investment is required to adapt these spaces for leisure use. Another challenge is that leisure tends to generate lower rent and sales densities than retail, so there are financial implications in diversifying space.
How are retailers and landlords responding?
Retailers are increasingly focusing on how to make shopping more fun for consumers. Only last week Debenhams announced plans to close ten underperforming stores and invest in others to make visits ‘a fun leisure activity’, giving more space to restaurants and beauty services, and to engage more effectively with consumers through digital channels.
Landlords are choosing to dedicate more space to leisure. Some shopping centres are repurposing under-utilised retail space for leisure, while others are extending space. For example, the former BHS site in St Enoch Centre in Glasgow will combine a cinema, restaurants and retailers. British Land recently submitted plans for a £300m Leisure Hall at the Meadowhall shopping centre in Sheffield.
What are the benefits?
As consumers increasingly look for fun experiences, they may be less attracted to retail only destinations. Offering a wider variety of leisure activities will attract footfall, increase dwell time and support the performance of retailers in the area.
Where is the opportunity?
This presents a significant growth opportunity for leisure operators with compelling, family-friendly brand propositions which are adaptable to retail spaces.
Bowling is a prime example of this. Hollywood Bowl reported strong LfL revenue growth of 6.8% in 2016, and opened in Southampton’s West Quay development last December and will also open in Derby’s Intu retail and leisure development this month. The rise of trampolining has been well covered, and several operators, such as Oxygen Freejumping, have plans to open in shopping centres. Other operators offer activities that increase dwell time at shopping destinations. For example, Treetop Adventure Golf offers a new take on indoor mini golf at St David’s shopping centre in Cardiff, an activity that appeals to a wide range of consumers and easily fits around shopping and eating out.