Featured Sector: Retail

The latest Glenigan data shows that the underlying value of retail starts in the first quarter of 2014 was 28% higher than a year before, and further growth is anticipated in line with improving economic prospects.

The latest OBR forecasts released alongside the Budget in March 2014 signal a sustained recovery in household consumption over the next five years supported by a strengthening in real earnings growth and a pick-up in net borrowing. Growth in the second half of 2013 was driven by shopping centre developments. We anticipate this trend will continue, with town centre mixed use schemes likely to be a particular focus. Structural trends are resulting in an increasingly polarised retail market. With a continued oversupply of shops in many high streets, prime shopping centres and larger town centres will be the focus of high profile, high value developments.

This is in contrast to the supermarket sector, which supported activity during the market downturn but is not expected to fuel further growth. The market leaders have already redirected their development programmes towards their convenience store networks, while many of the others are following suit. Morrison, for example, has recently announced that it will build out its existing pipeline over the next two years.

However supermarket clients will remain an important source of work for the retail construction sector. In addition to the continuing flow of convenience store developments, Asda has recently announced plans to develop 40 superstores and 100 supermarkets over the next five years, in addition to 150 forecourt shops. These will be focused in London, the South East and South West.