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Retail and Commercial Leisure Study 2005
5
Retail Futures: Market Demand Assessment
5.01
This section sets out our assessment of the market demand for new retail and leisure
facilities in North Norfolk’s main centres. This analysis is based on our in-house datasets
that regularly monitor the requirements of retail and leisure businesses, supported by our
market intelligence of operator and investor requirements at the national, regional and local
level(1).
5.02
DTZ’s research indicates that there is currently limited demand from retail and service
businesses for representation in North Norfolk District’s main centres. Only Fakenham (9
requirements), North Walsham (6), Cromer (6) and Sheringham (2) have any stated
requirements.
5.03
This limited demand reflects the relative attraction and investment potential of larger
neighbouring centres, which all have significant retail demand - Norwich (103
requirements), Kings Lynn (37) and Great Yarmouth (26). Furthermore, most of the
District’s centres lack the critical mass of retail facilities and catchment populations to
support major new retail and leisure uses.
5.04
The following commentary describes some of the key trends that are driving changes in the
retail and leisure sectors and specifically how this is being manifested in terms of the scale,
quality and location of new retail and leisure investment and development.
1.
Convenience Goods Retailers - Market Demand
5.05
The UK grocery sector has experienced dramatic changes in its location, format and offer
since the 1980s. Growth during most of this period has been characterised by the expansion
of large out-of-centre foodstores, which recent research shows account for £2 out of every
£5 spent on groceries in the UK(2). At the same time, national trends indicate a decline in
the number of food specialists by 19% between 1992 – 2002 and an increase in the number
of large superstores by 50% (from 860 to 1,292 outlets) over the same period.
5.06
The Government’s recent political and policy commitment to urban renaissance and town
centre regeneration has resulted in a significant reduction in planning applications and
permissions for new out-of-centre stores. This scaling down of out-of-centre development
has been further compounded by the fact that the forecast growth in convenience goods
spending is significantly lower than for comparison goods retailing (see Section 8). This
means that there is less demand, and therefore capacity, for new convenience goods space.
5.07
These trends in policy and consumer demand have impacted on the business strategies of
the major food retailers. Whilst they are continuing with new store openings and
extensions, albeit on a smaller scale than before, they are also trying to differentiate
themselves from their competitors in order to open up new markets and increase market
share in this highly competitive sector. This has manifested itself in a number of key trends
over recent years, including:
(i)
Consolidation – the takeover of Safeway by WM Morrison has enabled it to expand
its UK coverage and market share. By March 2004 Morrisons had rebranded 84
Safeway stores and was planning a further 148 conversions in 2005. However,
(1)
Market demand is highly dynamic and sensitive to changes in the market place. Thus our in-house datasets can only provide a
broad indication of market demand at a particular point in time and do not necessarily reflect the potential increase in business
requirements that can occur if new opportunity sites and/or schemes are developed and marketed.
(2)
The National Retail Planning Forum (November 2004) ‘The Role and Vitality of Secondary Shopping - a New Direction’
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Morrisons has been forced into significant changes at management level following
profit warnings in March 2005, which indicated that whilst like-for-like sales in the
existing Morrison stores and rebranded Safeway stores rose by 7-11%, sales in
existing Safeway stores fell by almost 7%. Other operators have also benefited from
the disposal of over 164 Safeway stores up to March 2005 (with a further 92 to be
sold by the end of 2005). For example, Somerfield has purchased 114 stores,
although 22 of these are currently under investigation by the Competition
Commission following concerns by the Office of Fair Trading (OFT).
5.08
5.09
(ii)
Product diversification - non-food sales now account for an increasing share of the
turnover of grocery retailer multiples. Tesco and Asda already have a large non-food
component, and Sainsbury has intensified its non-food coverage in larger stores.
Although Morrison still remains focused on its main food business, DTZ believe it is
likely to diversify into non-food once it has successfully integrated Safeway’s stores
into its business. This is illustrated by the recent proposals to increase the non-food
offer in existing Morrions stores in both Cromer and Fakenham, as part of extensions
to their existing floorspace.
(iii)
A ‘return’ to the high street and the growth of convenience (‘c-store’) formats –
The sequential test has resulted in new smaller store formats on the high street, such
as Tesco’s ‘Express’ and Metro formats, and Sainsbury’s ‘Local’ stores. It is likely
that these smaller store formats will be rolled out to smaller and medium-sized centres
in the future, particularly following the move by Tesco (and other operators) into the
‘c-store’ format, following its purchase of T&S stores. There may, therefore, be
opportunities for smaller-scale formats to be located in some of North Norfolk’s
centres in the future.
(iv)
The growth of the discount food retailers – European food operators (particularly
Aldi, Lidl and Netto) have experienced significant growth over the last 10-15 years.
These operators, along with Kwik Save, are (to varying degrees) seeking opportunities
to expand their network of centres and market share in the competitive grocery sector.
If these trends continue over the medium term (and planning policy remains unchanged), it
is DTZ’s view that the main trends driving demand and development over the next 5–10
years will comprise the following:
•
continued applications for extensions to existing larger foodstores (both in-town and
out-of-centre), as operators attempt to increase their non-food offer.
•
the growth of convenience (‘c-store’) operators and discounters as operators seek to
increase their representation and market share in smaller and medium-sized towns. This
trend could lead to high profile retailers such as Tesco and Sainsbury targeting centres
that they would not have previously considered, which may benefit some of North
Norfolk’s smaller centres.
•
an increase in the number of planning applications for mixed use foodstore
developments. For example, both Tesco and Sainsbury are now looking to develop
mixed use schemes in metropolitan and urban areas, which generally comprise new (or
extended) foodstores and residential units (or other uses) in the ‘air space’ above stores.
Based on the Council’s figures, it is clear that there is significant pressure for new foodstore
and convenience goods retailing in the District. There is currently planning permission for a
small in-town Budgens foodstore in Sheringham (Station Car Park site) and an extension to
the existing Morrisons store in Fakenham. There are also applications for new foodstores
(in Fakenham, Wells Next The Sea and Sheringham), as well as an extension to the other
Morrisons store in Cromer.
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5.10
5.11
As a result, much of the current demand is limited to smaller foodstore and convenience
goods retailers:
•
Iceland has requirements for units of 279 sq.m (c.3,000 sq.ft). in Cromer and North
Walsham.
•
Farmfoods Ltd is seeking representation in Fakenham for a store of between 7.4 sq.m –
232 sq.m (5,000 – 7,000 sq.ft).
•
Greggs the Bakers has a stated requirement for a unit of between 7.4 sq.m – 232 sq.m
(800 – 2,500 sq.ft.) in Fakenham.
A more detailed matrix of retailer requirements for each town is set out in Appendix 6.
2.
Comparison Goods Retailers - Market Demand for the High Street
5.12
The High Street is currently facing a difficult period. Market indicators show that consumer
spending growth is at its weakest for almost two years. The latest official figures show a
slowdown in retail sales growth and footfall on the high street. For example, retail sales in
the UK fell by 0.6% in the three months to February 2005 and the national accounts
indicated a 0.5% drop in real household disposable incomes (after allowing for inflation), in
the fourth quarter of 2004. This fall in incomes was the first such decline since Autumn
2003 and the steepest decline since the beginning of 2002.
5.13
This slowdown is due, in part, to a marked dip in consumer confidence following a period
of rising interest rates and household debt. This debt burden and the increase in savings,
which is expected as a result, is likely to mean that private consumption will be less buoyant
over the short term. This has been further exacerbated by the cooling housing market,
which is expected to deter the large volume of mortgage equity withdrawal that has partly
helped to underpin the growth of consumer spending over recent years.
5.14
These tougher trading conditions are inevitably impacting on retailers’ sales and profit
margins. All sectors of the retail market have been hit and examples over the last 6-12
months include1:
5.15
1
•
Woolworths – like-for-like sales in its high street stores fell by 1.3% in the year to
January 2005. These trading problems have subsequently delayed its programme to
refit 50 more high street stores, in addition to the 48 already completed.
•
Next – despite full-year sales rising by 13% at the end of January 2005, Next
announced in March 2005 that like-for-like sales had since fallen by 0.9%.
•
Topps Tiles – the country’s biggest ceramic tiles retailer experienced a 2-3% fall in
like-for-like sales in March 2005. This impacted on the company’s profits and resulted
in a 23% fall in its share prices overnight (equivalent to £114 million).
•
Comet – despite a 3.9% increase in like-for-like sales in the year to January 2005,
Comet announced in March 2005 that it was set for its first sales slowdown in six years.
Nevertheless, despite this more pessimistic outlook for the retail sector, the evidence
suggests that demand for space in prime town centre locations is still relatively strong.
Source: The Times (24 March 2005, p.55)
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5.16
DTZ has identified the following key sectors that are driving demand for space at the
national and regional level, and we comment on how this is broadly being manifested in the
District’s main centres.
(i)
Department and Variety Stores
5.17
Although analysts argue that the mixed goods profile of department stores should help to
insulate this sector against any major downturn in retail spending, Allders was forced into
administration in early 2005 and part of its portfolio was sold to other major retailers,
including British Home Stores (BhS), Debenhams and Primark.
5.18
Nevertheless, some major department store operators, such as John Lewis, are still actively
targeting selected city centres for expansion. Other key operators are also looking at
medium-sized centres. For example, Debenhams currently has 104 stores, with plans for an
additional 20 stores by 2008. DTZ understand that Debenhams is also looking to open a
number of smaller format stores of 2,323 sq.m – 3,252 sq.m (c.25,000 – 35,000 sq.ft) in
town centres that cannot support a full sized store. These will inevitably be in places where
physical development constraints exist, but where there is a sizeable catchment and demand
for a department store. This may, therefore, represent an opportunity for the larger centres
in North Norfolk District - namely North Walsham, Fakenham or Cromer.
There are currently no stated requirements from any of the major department store operators
for representation in the District. Argos is the only variety store currently looking for
between 929 sq.m – 1,486 sq.m (10,000 – 16,000 sq.ft.) in North Walsham and/or
Fakenham. Please note that this requirement could be for either a town centre, edge-ofcentre or out-of-centre unit.
(ii)
5.19
5.20
Modern multiple fashion retailers generally have requirements for larger unit sizes, as it
allows them greater flexibility to display a wider range of goods in a more customerfriendly environment. A number of established retailers in this sector have significant
expansion plans up to 2006. For example:
•
Next is aiming to open 44,595 sq.m of new space and is predominantly looking for
larger units, similar to its 4,000 sq.m anchor store in the remodelled Arndale Centre in
Manchester. This is despite current concerns of a challenging retail environment.
•
Arcadia (owned by Philip Green) is also reportedly targeting an additional c.46,500
sq.m of new shop space, on top of its existing 2,000+ stores in the UK. Arcadia has
also identified 60 potential new sites for the Top Shop format. The spin-off fascia Top
Shop Shoes is to be expanded after its successful pilot in Manchester.
Other high street stores with expansion plans in the fashion sector include H&M, Monsoon,
Mango and Zara. They are all generally looking for larger footprints in order to capture
higher market shares. However, much of this growth will be concentrated in Britain’s ‘top
100 – 200’ centres, and there appears to be limited demand for representation in smaller
rural, market and coastal towns.
(iii)
5.21
Fashion Retailing
Value Fashion Retailing
A significant trend on the High Street over recent years has been the increased polarisation
in the retail market between the more expensive brands at one end of the spectrum and the
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value/discount clothing retailers at the other. Research shows that the value-fashion
retailers (such as Matalan and TK Maxx) have doubled their market share of the clothing
sector between 1995–2001, and strong growth is forecast up to 2006. Matalan, which had
previously concentrated on out-of-centre locations, is currently targeting town centre sites
due to the stricter planning policy climate.
5.22
The smaller value-fashion specialists (such as Primark and Peacocks) are also looking at
low-cost city centre sites, market towns and secondary shopping centres in large urban
areas, where overheads are relatively low. New players are also opening on the High Street.
The most high profile example is ‘George’ (at Asda), which is looking to increase its market
share by opening stores on the high street and out-of-centre. As a reaction to this growth,
middle-market operators are segmenting their offer further to provide either more up-market
own-brands (such as Per Una in Marks & Spencer), or more heavily discounted offers
within stores (such as in New Look).
5.23
Significantly, Next announced in March 2005 that it was not intending to continue with its
strategy of aggressive price cuts, due to the slump in fashion sales. Indicators show that
clothing prices on the high street fell by 6.2% in the year to February 2005 as competing
chains forced prices down. Indeed, over the past three years, the average selling price of
products at Next has fallen by 12% while volumes increased by 73%.
DTZ’s review indicates that Peacocks Stores Ltd has a requirement for a unit of between
465 sq.m – 1,394 sq.m (5,000 – 15,000 sq.ft) in Cromer, North Walsham and/or Fakenham.
(iv)
5.24
Other Retailers
DTZ’s review of retailer requirements indicates that there is recorded demand for space in
the District’s main centres from a mix of charity shops (Barnardo’s and British Heart
Foundation in Fakenham); card retailers (Cardfair Limited in Fakenham, Cromer and North
Walsham); opticians (Specsavers in Cromer and Fakenham); and homeware retailers (Fads
Homestyle in Cromer, North Walsham and Sheringham). In the case of Sheringham there is
also a stated demand from Size Up Clothing for a store of between 1,250 – 2,000 sq.ft.
3.
Comparison Goods Retailers - Market Demand for Out-of-Centre Retailing
5.25
Despite the slowdown in new retail warehouse development due to the tightening of the
planning system, research2 shows that approximately 280,000 sq.m will be developed in
out-of-centre and edge-of-centre locations in 2004/05. Demand for retail warehouse units
and retail park locations remains strong, mainly because they offer large unit sizes, lower
cost premises and are generally served by free car parking. The top three retailers, in terms
of trading space on retail parks are B&Q, Homebase and Currys.
5.26
In terms of investment performance, the retail warehouse sub-sector has out performed the
rest of retail property (including department stores, variety stores, supermarkets and other
retail) over the last 23 years (and particularly during the last decade). One of the main
driving forces behind the strong growth has been high consumer spending on household and
durable goods.
2
Source: The Times (19th June 2004)
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5.27
Thus, despite the tighter planning restrictions, developers and occupiers are still pushing
ahead with applications and development to try and meet the high levels of demand. The
key retailers driving demand in the out-of-centre retail warehouse market are briefly
described below:
(i)
5.28
DIY and hardware
This has been the best performing sector over recent years and analysts predict that growth
will remain strong during 2005, as it is argued that any falling confidence in the housing
market will result in fewer transactions and more people investing in their homes. This is
also the most consolidated ‘out-of-centre’ sector and is dominated by just four key players –
B&Q, Focus, Wickes and Homebase. All the DIY operators are rolling out larger ‘categorykiller’ stores as well as smaller stores, targeted at edge-of-centre and even town centre
locations. They are also introducing ‘mezzanine’ floors in some stores as a means of
extending the floor space, often without the need for planning permission. This is
increasingly the case as the government moves to close the this current ‘loophole.’
Currently B&Q has a requirement for a 4,181 sq.m (c.45,000 sq.ft) retail warehouse unit in
North Walsham
(ii)
Electrical goods
5.29
The constant stream of new products, innovations and technology has fuelled the growth of
this sector over recent years - such as digital/plasma televisions, third-generation mobile
phones, cheaper computers/laptops and MP3 players. It is expected that PC demand will
also increase with the wider usage of broadband and digital photography, particularly as
prices are set to fall.
5.30
However all the major retailers – Dixons/Currys Group and Comet – are facing severe
competition from non-traditional retailers such as supermarkets and are reviewing their
current portfolio of stores. For example, Dixons announced in 2004 that it will reduce its
high street presence by two-thirds over the next ten years. It plans to close over 100 of its
smaller high street stores and open new Dixons XL format (larger stores of between 929
sq;m – 2,787 sq.m) in edge-of-centre locations. Nevertheless, the withdrawal of Dixons
from smaller towns and High Streets is creating opportunities for other retailers, such as
Robert Dyas and Argos.
DTZ’s research shows that there are currently no stated requirements from electrical goods
retailers for representation in North Norfolk’s main centres
(iii)
5.31
Furniture and Carpets Sector
Analysts also predict strong growth for this sector over the next five years. However, the
market leaders – MFI, Ikea, DFS and Courts – are facing increased competition from other
retailers - particularly department and variety stores - leading to increased consolidation.
Both MFI and Ikea are looking to expand their out-of-town store portfolio.
•
Ikea has recently opened a new store in Edmonton, North London, but is also
considering edge-of-centre sites because of the tighter planning restrictions.
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•
5.32
Allied Carpets is also planning a return to the high street and has targeted locations
across the UK.
This sector is one of the most cyclical of all and, with consumer spending growth slowing in
the face of rising interest rates, it may experience more difficult trading conditions in the
short term. Nevertheless, new entrants in this sector include Danish furniture retailer ILVA,
which plans to open 20 new stores across the UK over the next decade. As part of this
expansion it has recently (January 2005) purchased the failed M&S ‘Lifestore’ in
Gateshead.
DTZ’s research shows that there are currently no stated requirements from furniture and
carpet retailers for representation in North Norfolk’s main centres
(iv)
5.33
Other Retailers
A new wave of multiple retailers which have been traditionally associated with high street
locations are also looking to expand in out-of-town locations in order to reach new
customers and increase market share. Despite the tighter planning restrictions, operators
who are currently targeting larger stores in out-of-centre locations include Next, Early
Learning Centre, Borders, HMV, Boots, Mothercare, Arcadia Group and Clinton Cards. In
certain locations this could mean that existing smaller town centre stores are vulnerable to
closure. Currently there is no evidence that the branded high street retailers are looking for
out-of-centre locations in the District, although there is a precedent following the opening of
Argos in the North Norfolk Retail Park outside of Cromer.
DTZ understand that Halfords Ltd. currently has a requirement for retail warehouse
formats of between 372 sq.m – 929 sq.m (4,000 – 10,000 sq.ft) in the Fakenham and
Cromer areas.
5.34
The strength of demand from retailers for space in out-of-town locations, coupled with a
continuing shortage of new supply, has resulted in above average rental growth in the retail
warehouse sector. This, in turn, has placed pressure on other retail sectors that have been
unable to generate the level of sales densities required to sustain these higher rents. Recent
casualties include value/discount retailers such as Brunswick Shoes, Textile World and
What Everyone Wants, all of whom have been put into administration. Woolworths also
plan to reduce its underperforming portfolio of out-of-town ‘Big W’ stores. These stores
represented more than 130,000 sq.m of selling space, of which almost 60% had open A1
consent. Of the original 24 stores, eleven have been sold or reduced in size. It has been
reported3 that the remaining 13 stores are unlikely to be sold but would be cut down to fit
with the other successful out-of-town stores of about 3,716 sq.m (40,000 sq.ft).
Nevertheless, DTZ understand that there is a queue of retailers ready to purchase some of
these stores, including Next, Matalan, Asda, TK Maxx, Wickes, Boots, Tesco, TJ Hughes,
PC World and Currys.
5.35
In summary, the out-of-centre retail market has evolved from low-cost and narrow-margin
formats, to higher cost and wider-margin structures, similar to those on the high street. As
planning permissions become increasingly harder to obtain, so developers, investors and
retailers also have to be more innovative and flexible about how they extend their
businesses. As a result a new generation of retail parks and stores are emerging that are
very different from earlier developments. Operators are increasingly looking to add value to
3
Financial Times 24/03/05
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their retail offer, rather than simply ‘pile-it-high and sell-it-cheap’. For example, retailers
are experimenting with leisure and A3 uses, often by introducing mezzanines into existing
stores, and landlords are also looking to invest and asset manage their portfolios of retail
parks through improved design, branding and tenant mix strategies.
4.
5.36
5.37
4
5
6
E-commerce – Potential impact on market demand
Over the last five years the growth of the Internet has had a significant impact on the way
people live, work and shop. Not surprisingly there are many different views and forecasts
as to the potential impact of the Internet and ‘e-commerce’ (or ‘e-tailing’) on shopping and
leisure patterns. In broad terms recent research indicates that:
•
the UK has the largest number of active adult Internet users in Europe.
•
The IMRG (Interactive Media in Retail Group) forecast some 24 million people are
expected to shop online in Britain during 2005, spending some £19.6bn. Internet
shopping accounted for just £300m of retail sales in 1999, by 2004 consumers were
spending £14.5bn online according to IMRG.
•
Christmas 2004 was forecast to be the best ever for online retailers with predictions
from Verdict and IMRG4 anticipating a year-on-year increase in sales of 40%.
•
Electrical and clothing goods were experiencing strong growth online, with more than
£2bn of electrical goods sold over the Internet last year. Dixons, the high street
electrical retailer, expects its online sales – currently at £170m – to hit £1bn in the next
five years. Meanwhile clothing is another big expansion area, with sales growing 37%
to £644m in 20045.
Although it is clear that Internet-based shopping will increasingly impact upon town
centres, it is difficult to forecast the likely scale and focus of this impact on Britain’s high
street. The research evidence seems to indicate that, over the short to medium term, the
future of the high street is not under significant pressure. The reasoning is that the Internet
cannot fulfil the leisure and social needs of retailing and therefore its impact is unlikely to
threaten the future of town centres. The ODPM Property Advisory Group (PAG, 2001) has
looked at the likely impact on the retail offer in different types of urban areas and suggested
that6:
•
Outer London and the South East - Attractive and larger towns will do better than
more ordinary towns and generally better than Northern towns, because of their greater
influence.
•
Metropolitan Areas (excluding the South East) – They offer better choice, so should
be less badly affected than smaller towns.
•
Towns outside the South East - Could lose trade to larger towns, unless they have
other attractions, such as a pleasant environment.
•
Country Towns - Could find e-commerce particularly attractive, although they
probably have more of a convenience role, which could be less affected.
The Guardian: 06/01/05
Financial Times: 06/03/05
As referred to in BCSC (2004) ‘The Smaller Towns Report’.
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5.38
Thus although e-commerce may not pose an immediate threat to the economic viability of
many small centres, it is likely to be increasingly relevant over the long-term, although in
different ways depending on the characteristics and attractions of particular centres. In the
case of North Norfolk, many of the District’s centres will be able to meet the potential threat
of e-commerce to their future vitality and viability, as they also function as important
holiday destinations.
5.39
Nevertheless, in a rapidly changing marketplace it is increasingly important to plan for
potential change in the retail and leisure sectors. Thus the better managed and marketed the
centre is, the less vulnerable it will be to the growth of the Internet. The best way to ensure
against any impact is to offer a range of complementary, non-retail attractions. Smaller and
medium-sized centres, that offer a high level of convenient shopping facilities, supported by
niche goods, leisure and tourist attractions are likely to be more resilient to these
technological changes. Inevitably, there will be increasing polarisation of prime and
secondary property within centres and between towns. Therefore centres need to diversify
their role in order to be resilient to changing future circumstances.
5.40
In conclusion, it is hard to accurately forecast the extent to which ‘e-commerce’ will impact
on the high street and market demand. Nevertheless, it has already impacted on the
business strategies of key retailers and sectors, and in certain cases this has manifested itself
on the high street by speeding up the trend towards the closure of banks, travel agencies and
post offices. For example, over the last decade Britain has lost over one-quarter of its high
street bank branches, due principally to the rise of telephone and Internet banking, along
with the increase in ATMs (and branch-less banks). The closure of banks and post offices
in smaller urban and rural centres can have an adverse impact on their overall vitality and
viability, as they are significant generators of day-to-day footfall leading to ‘spin-off’
benefits for other shops and facilities.
5.41
Planning and managing change on the high street due to the impact of the Internet and new
technological advances represents a major challenge to all centres in the future. The role of
town centre management will become ever important, as it will be necessary to build even
closer partnerships between key stakeholders to meet the challenges ahead and to identify
opportunities for using the new technology to promote and market centres in more
innovative ways.
Summary
5.42
The retail sector has experienced some profound changes over recent years. The mix of
social and economic conditions which prevailed in the 1980s has triggered the arrival of a
much more mobile and discerning consumer seeking not just value for money, but also
increased choice in terms of goods, shopping and leisure environments and experiences.
5.43
These conditions continue to impact on the nature and location of today’s retail and leisure
provision. Consumer loyalty has become a vital ingredient in the success of town centres.
Increasingly, town centres have to be able to fulfil the role of destination shopping and
entertainment locations. This means providing a wide range of retail and leisure facilities,
which are able to attract and retain the interest of the entire family. In return such schemes
benefit not only from much wider catchment areas, but also increased footfall, spend and
substantially longer shopping trips. At the same time, this meets the Government’s
objectives of sustainable communities and sustainable development in thriving town and
city centres.
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5.44
It is evident, however, that whilst town centre development has increased over the last
twenty years, the successive waves of out-of-centre investment have squeezed the market
share of the traditional high street. There is also growing evidence of polarisation between
centres in regions, with the larger more dominant centres benefiting from increased
investment, as well as between prime and secondary/tertiary locations on the high street. As
a result, the larger cities and towns have continued to outperform the smaller and mediumsized centres in terms of average rental growth and market demand.
5.45
DTZ research shows that demand from retailer and service businesses for representation in
North Norfolk is limited. In its main centres the strongest demand is from the value sector.
In out-of-town locations occupier interest is more limited, apart from B&Q’s stated
requirement for a medium-sized store in North Walsham.
5.46
Demand in the convenience goods sector is stronger, and a number of planning applications
for new foodstores and extensions to existing stores are currently being considered by the
Council. In the context of PPS6 and the sequential approach (paras. 3.13 – 3.19), DTZ
advice the Council that developers and operators should be able to demonstrate that, in
seeking to find a site in or on the edge of existing centres, they have been flexible about
their proposed business model in terms of:
•
•
•
the scale and format of the development;
car parking provision; and
the scope for disaggregation (PPS6: paras. 3.17 –3.18)
5.47
The purpose of this exercise is, according to PPS6, to explore the possibility of enabling the
development to fit onto more central sites by reducing its overall footprint. In this context,
this section has demonstrated that the larger food retailers are rolling out smaller store
formats in town centre locations (e.g. Tesco Metro and Express stores). At the same time,
discount food retailers, such as Aldi, sell a much more limited range of food products than
would be available in a larger food superstore. They do not offer facilities that may be
found in smaller centres, such as a butcher, baker or fishmonger, and non-retail facilities
such as dry cleaning, pharmacy or a post office. In addition, the discount food retailers
operating hours are not usually as long as those of superstores, as they are not normally
open on Sundays and do not have late night opening. As such, there could be more of a role
for their presence within secondary centres and shopping areas, to complement existing
convenience outlets, where these continue to exist.
5.48
The emergence of ‘e-commerce’ over recent years also represents a major challenge to the
future vitality and viability of the high street. Town centres will increasingly need to adapt
and diversify their roles and activities to differentiate themselves from the ‘physical’ and
‘virtual’ competition. Although it is still too early to predict the potential implications for
market demand, it is clear that it is impacting on a number of key sectors, such as books,
music and travel agents.
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6
Leisure Futures: Market Demand and Capacity Assessment
6.01
The contribution that commercial leisure (i.e. bars, restaurants, cinemas, healthclubs, etc.)
and public leisure (i.e. theatres, museums, galleries, public swimming baths, etc.) facilities
make to the overall vitality and viability of town centres, particularly the evening economy,
is an important part of the Government’s urban renaissance and town centre policy agenda.
6.02
This section describes some of the key trends that are driving market demand in the
commercial leisure sector. It then examines how demand is being manifested at the
national, regional and local level, and how this compares with DTZ’s broad assessments of
quantitative and qualitative need.
The Key Drivers of Growth in the Commercial Leisure Sector
6.03
The commercial leisure industry has been one of the fastest growing sectors of the UK
property market over the last decade. Research(1) shows that the leisure sector contributes
10% to Gross Domestic Product (GDP) and employs around 2.5 million people, generating
1 in 5 of new jobs. The sector’s dynamic growth has been driven by changes in consumer
lifestyles (such as eating out, going to the cinema and keeping fit), rising affluence and
increased spending on leisure. This, in turn, has generated increased demand for new
leisure and entertainment facilities.
6.04
Leisure spending can be divided into two types ‘in-house’ spend on electrical items (such
as DVDs, CDs, playstations, etc.) and ‘out-of-house’ spend (such as going to the cinema,
bowling, gambling, eating out in restaurants and visiting pubs). Figure 6.1 shows that
household spending on leisure goods and services has increased by 163% between 1978 and
2002/03 (i.e. c.4% per annum). By comparison over the same period, spending on
household goods has increased by 1.8% per annum, whilst net spending on housing has
increased by 1.9% per annum.
Figure 6.1: National Household Expenditure (1978 – 2002/03)
450.00
Leisure services
Leisure goods
400.00
Fares and other travel costs
£s per week @ 2002/03 prices
350.00
Motoring
300.00
Personal goods and services
250.00
Household services
200.00
Household goods
150.00
Clothing and footwear
100.00
Alcoholic drink
Food and non-alcoholic
drinks
50.00
0.00
1978
Housing (Net)
1980
1982
1984
1986
1988
1990
1992
1994 95
1995 96
1996 97
1997 98
1998 99
1999 00
2000 01
2001 02
2002 03
Source: ONS Family Expenditure Survey 2002/03
(1)
Business in Sport & Leisure (BISL) Handbook 2003/04
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6.05
Recent projections by Experian indicate that average spend per capita on leisure could
increase by between 1.4% (‘long term’ trend) and 2.0% per annum (based on Experian’s
‘ultra long-term’ projections).
Table 6.1
Forecasts & Projections of UK Spending per Head Volumes (% annual change)
(@ 2002 Prices)
Experian projections
Ultra long- term trend
Long-term trend
Medium-term trend
2.0
1.4
1.7
Leisure services
Source: Experian Business Strategies: “Retail Planner Briefing Note 1.2” (November 2003)-Tables 4 & 5
6.06
A major driver of future demand for leisure (and retail) will be the significant ageing of the
population. In 2002 there were approximately 19.8 million people in the UK aged 50 years
or more, which is 24% higher than the 16 million in 1961. This is forecast to increase by
over 40% up to 2031, when it is estimated that there will be c.28 million people aged over
50 years. This ageing population will have a significant impact on the demand for different
leisure products and services. In broad terms analysts predict that these ‘grey’ consumers
will be more active than previous generations and will expect a wide range of quality leisure
products and services. This is particularly relevant to North Norfolk, as it has an older age
profile than the national average.
Demand for Leisure
6.07
Developers and investors have responded to the growth in consumer lifestyles, demand and
spend by opening new and more sophisticated leisure formats. A good example of this is
the growth of managed leisure centres and parks. These parks generally comprise a mix of
leisure uses (such as bowling alleys, health & fitness clubs, nightclubs, restaurants and bars)
and are usually anchored by large multiplex cinemas. Despite the tighter planning policy
controls on out-of-centre development, leisure parks are now viewed by the property
industry as a less risky long-term investment. This is confirmed by recent research, which
indicates that there are over 200(2) leisure parks in the UK, ranging in size from 3,250 sq.m
up to 28,000 sq.m.
6.08
The following commentary briefly describes the current demand from leisure operators
within each of the main sub-sectors of the commercial leisure market. It also provides an
update of the current reported demand for commercial leisure facilities in North Norfolk
District and its main centres.
Eating and Drinking Out
(i)
6.09
The growth of drinking and eating out as a leisure activity has fuelled significant changes in
the pub and restaurant sector over the last decade. For example, between 1998 and 2002 the
‘eating out’ market grew by 22%, reaching an estimated value of approximately £24.4bn (3).
Some of the main trends that are driving (and meeting) this demand include the following:
•
Increased consolidation in the pub industry over the last five years, which has impacted
on the smaller independent operators. Research shows that the number of pubs has
declined by c.6.5% since 1990 and the greatest impact has been on traditional pubs and
inns, which have lost younger customers to the larger, urban branded ‘theme’ bars.
(2)
‘The Definitive Guide to Retail & Leisure Parks’ (2003), FPD Savills & TW Research Associates.
(3)
BISL, 2003-04 Ibid
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Nevertheless, some market experts predict a resurgence of “community pubs”, due to
changes in fashion and boredom with high street brands.
6.10
•
The food offer has emerged as a particularly strong driver of success in the pub industry
and has resulted in the growth of so-called ‘gastro-pubs’ as eating out destinations (such
as the All Bar One, Pitcher and Piano and Slug and Lettuce formats). This has been
driven by the development of more varied menus to cater for different tastes and the
growing female market.
•
The decline in market value of some long established brands (such as Chez Gerard,
Garfunkles, Café Uno and City Centre Restaurants) due to increased competition from
both multiple and niche restaurants such as ASK central, Pizza Express and Nandos.
•
The recent national expansion of a number of new restaurant operators, including the
Italian-owned Basilico and Fornovivo, Clapham House, Bombay Bicycle Club, The
Real Greek, Gourmet Burger and Urban Dining.
•
Consolidation in the coffee sector, with a few brands emerging to dominate market
share – namely Starbucks, Café Nero and Costa Coffee.
•
Growth of businesses that specifically target lunchtime trade, particularly in London
and the South East. Examples include The Natural Café, Eat and Realburger World.
Coffee Republic has also entered this market by rebranding its coffee shops as
‘Republic Deli’ outlets.
Recent changes in the Use Classes Order (UCO)1 now mean that local authorities have been
afforded more control over the growth and location of new cafés, restaurants, takeaways and
public houses in their town centres. The main change to the UCOs has been the
replacement of the former class A3 (food and drink) by the new and amended:
•
Class A3: limited to restaurant and café uses (ie. use for the scale of food for
consumption on the premises).
•
Class A4: limited to drinking establishments, such as pubs and wine bars.
•
Class A5: limited to hot food takeaways.
6.11
Thus, whilst bars and takeways are able to revert to restaurants without requiring planning
permission, moves in the other direction will require local authority approval. It is the
Government’s aim that these changes will help check the unfettered growth of branded bars
and poor quality takeaways, whilst also limiting the anti-social impact on residential
amenity and visitor’s enjoyment of town centres, particularly as part of the promotion of
town centre evening economies. Other changes included the classification of Internet cafés
as A1 and nightclubs as sui generis (meaning uses on their own). Changes to or from these
sui generis uses will therefore always require planning permission.
6.12
The use class changes will therefore increase local authority control on the high street by
limiting the ability of operators to change use without planning permission. This should
provide greater ‘powers’ to North Norfolk District Council to monitor and control the
potential growth of A5 users in its town centres, and improve the quality of its café and
restaurant offer. Current licensing reforms also transfer responsibility for licensing from
magistrates to local authorities. The Government believe that operators in the same area
will choose to set different hours of operation and that this will therefore reduce the
concentrations of people leaving licensed premises at the same time, which can often result
1
The Town and Country Planning (Use Classes) (Amendment) (England) Order 2005 and the Town and Country Planning (General Permitted
Development) (Amendment) (England) Order 2005.
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in ‘flashpoints’ of crime and violence in centres. Together, the planning and licensing
reforms will allow local authorities considerable control over the leisure and entertainment
industry.
6.13
Despite the growth of eating and drinking outlets over recent years, DTZ’s market
intelligence indicates that there is currently no demand from these types of operators for
representation in the District, or its main centres. This is surprising, given that many of the
District’s centres are strong tourist and visitor destinations.
6.14
In order to assess the potential capacity for new eating and drinking establishments DTZ has
tested the reasonable assumption that between 20% - 30% of the forecast capacity for
comparison goods floorspace only (as set out in Section 4) can be supported by a mix of
new cafés, restaurants, pubs and wine bars. This assumption is backed up by recent
research(4), which states that: ‘… other types of ground floor building uses (apart from
retail) are important to the vitality of cities” and the hospitality industry, in its widest sense,
“…forms an important and sizeable proportion of premises averaging 24% of ground floor
stock”.
6.15
Based on this assumption, DTZ therefore forecast the following potential capacity ranges
for new A3/A4/A5 uses across the District. As Table 6.2 shows, the potential capacity for
A3/A4/A5 floorspace ranges from 2,660 sq.m to 7,920 sq.m net at 2016, based on Scenarios
1 – 3 (i.e. assuming a turnover ‘efficiency’ for existing floorspace and businesses of +1.5%
per annum). This capacity is reduced in Scenarios 1(a) – 3(a) to 1,620 – 5,370 sq.m net (i.e.
based on a higher ‘efficiency’ rate of +2.5% per annum).
Table 6.2
Commercial leisure floorspace capacity (A3 / A4 / A5 uses only) 2004 – 2016
Assumes an average sales density for new non-food space of £4,000 & £6,000 per sq.metre
Net square metres
2004
2008
2011
2016
Scenario 1:
-
620 - 1380
1,320 – 2,970
2,660 – 5,970
Scenario 1(a):
-
320 - 750
780 – 1,770
1,620 – 3,630
Scenario 2:
-
780 – 1,770
1,660 – 3,750
3,340 – 7,530
Scenario 2(a):
-
500 – 1,110
1,100 – 2,460
2,220 – 4,980
Scenario 3:
-
800 – 1,800
1,740 – 3,930
3,520 – 7,920
Scenario 3(a):
-
520 -1,140
1,200 – 2,670
2,400 – 5,370
Source:
DTZ Re:Map (Stage 9)
Notes:
The lower floorspace capacity forecast is based on an average sales density for new comparison
goods floorspace of £6,000 per sq.m and assumes that an additional 20% of net space could be for
supporting A3/A4/A5 uses.
The higher floorspace capacity forecast is based on an average sales density for new comparison
goods floorspace of £4,000 per sq.m and assumes that an additional 30% of net space could be for
supporting A3/A4/A5 uses.
6.16
(5)
This forecast capacity is not meant to be prescriptive. It provides only a broad indication of
the ‘theoretical’ potential for new A3/A4/A5 floorspace to complement new retail space that
may be developed in the District’s main centres as part of a mixed use scheme.
‘The Streetscape of major UK cities’, Savills, Winter 2004, pg.3
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(ii) Health and Fitness
6.17
The health and fitness market has been through a series of peaks and troughs since the
sector first gained popularity in the mid-1990s. Research shows that there are c.2,400 public
fitness and c.2,000 private health clubs in the UK(6) and that private healthclub membership
doubled from 1.7m in 1997 to 3.4m in 2002(7).
6.18
The health and fitness sector has experienced a period of consolidation over recent years.
This is due, in part, to the aggressive opening strategies of certain operators, which left
many of them over-exposed at a time when the fitness market fell ‘out of favour’ with
investors in the City.
6.19
The rapid growth of health and fitness clubs in certain areas has created increased
competition for members and market share, which has resulted in the weaker (poor quality)
clubs losing out. With increased competition in the premium sector, there has also been a
rise in attrition rates. Nevertheless, there still remains demand for an affordable health and
fitness product, such as provided by LA Fitness and Fitness First.
6.20
Despite the ‘cooling’ of the health and fitness market in recent years, there still appears to
be the potential for future growth, particularly as the Government is committed to tackling
health issues. Esporta for example, is aiming to open a series of ‘lifestyle’ clubs across the
UK. The concept is a fusion of the family club, the adult health and fitness club and the
racquet clubs. Esporta aims to open six of these in 2005 with more to follow in 2006.
6.21
Over recent years there has also been a marked shift in the location and format of new
health and fitness clubs, due mainly to the changes in planning policy guidance. Health and
fitness operators are increasingly targeting town centre sites and mixed-use schemes in town
centre locations. This can help to create a wider range of attractions and activity,
particularly in the evenings and at weekends. More flexible planning policies will therefore
need to be introduced which help to encourage an element of such uses within or on the
edge of town centres.
6.22
In summary the health and fitness sector over the last two years has polarised. This is
illustrated by the conversion to private companies of Esporta, Holmes Place, Fitness First
and Cannons health clubs. The main ‘players’ in the market are currently:
6.23
•
David Lloyd Leisure and Next Generation - concentrating on health, racquet and
tennis clubs;
•
Holmes Place and Greens - operating at the luxury end;
•
Virgin and Cannons - dominate the family-oriented health and fitness market;
•
LA Fitness and Fitness First – operate smaller in-town clubs at the value end of the
market.
Within the context of North Norfolk the health and fitness provision is dominated by Local
Authority and independent operators as shown in Figure 6.2 below.
(6)
The Leisure Database Company: Press Release on the “State of the Industry Report – April 2004” (http://www.onlineleisure.com/fiasofi2004pr.doc)
(7)
BISL, 2003-04 Ibid
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Figure 6.2: Health and Fitness Provision in North Norfolk
6.24
Figure 6.2 draws on the CACI Participation Profile report for North Norfolk District and
shows club membership in North Norfolk District (i.e. the proportion of adults who are
members of different clubs) benchmarked against the average for Great Britain. The figure
reveals a number of interesting trends:
•
Membership of health clubs and gymnasiums appears to be at or near the national
average in North Norfolk District. This would appear to indicate that there is limited
(or no) need for additional facilities in the District and its main centres.
•
Membership of sailing, squash, angling and rugby/football clubs is above the national
average.
•
Membership of golf and particularly tennis clubs is significantly below the Great Britain
average.
Figure 6.3: Club Membership in North Norfolk District v. Great Britain Average
Tennis Club
Squash Club
Sailing Club
Rugby / Football Club
Riding Club
Golf Club
Angling Club
Athletics Club
Gym
Health Club
0
Source: CACI
50
100
150
200
250
Index (GB average = 100)
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6.25
Nevertheless, despite the potential gaps in the market place, DTZ’s research indicates that
there is currently no demand from commercial health and fitness operators for
representation in North Norfolk District, or in any of its main centres.
(iii) Cinemas
6.26
The 1990s was characterised by the significant growth in new out-of-centre multi-screen
cinemas, often as anchors to leisure parks, or as an integral part of the tenant mix in
shopping centres. This growth was fuelled by a resurgence in cinema audiences (after a
period of steady decline during the 1980s), due primarily to the increase in the number of
Hollywood ‘blockbusters’ and the new developments in cinema technology (such as
surround sound). Research shows that:
•
Cinema audiences increased, on average, by 6.5% per annum between 1984 and 2003,
from 54 million to 180 million.
•
Multiplex cinemas represented some two-thirds of all cinema screens in 2003.
•
The number of multiplex cinema screens has increased from 875 to 2,254 between 1996
and 2003.
6.27
However, new multiplex cinema openings have slowed considerably over recent years,
mainly due to the tightening of planning policy on new out-of-centre development. As a
result, the main growth in this sector has been fuelled by the so-called ‘cityplexes’ (i.e.
mixed use multiplex developments in city and town centres that comprise shops and
restaurants), usually driven by developers rather than operators. Examples include the Ster
Century scheme in Romford, which comprises a 16-screen cinema on top of an existing
Sainsbury’s store, along with other shops and 175 flats. These types of mixed use
developments, with cinemas as anchors, are regarded as important contributors to the
evening economies of centres.
6.28
In North Norfolk District the cinema provision is limited (see Figure 6.4 below). There are
two regularly operating cinemas in the North Norfolk catchment area, namely:
•
Cromer – Regal (4 screens)
•
Fakenham – Hollywood Corn Exchange (2 screens)
6.29
In addition, there is a small one-screen cinema in Sheringham (The Little Theatre), which
operates infrequently.
6.30
Figure 6.5 is based on the CACI Participation Profile report for North Norfolk District and
indicates that the proportion of adults in the District who visit the cinema at least once a
month (21.4%) is slightly below the average for Great Britain (24.2%). This may be
explained by the relative under-provision of new multiplex cinemas in centres across the
District, which has resulted in a significant leakage of cinema-goers to Norwich in
particular. However, it may also reflect the socio-demographics of the District and the fact
that its slightly older age profile means that a higher proportion of its population have less
propensity to go to the cinema on a regular basis. This is partly borne out of the higher
proportion of adults in the District who are more likely to go to the theatre, opera, ballet and
jazz concerts than the national average.
6.31
DTZ are not aware of any current outstanding demand from cinema operators for
representation in the District or its main centres.
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Figure 6.4: Cinema Provision in North Norfolk
Figure 6.5: Performances (% of adults visiting at least once a month)
Theatre
Great Britain (%)
Pop / Rock Concerts
North Norfolk (%)
Plays
Opera
Jazz Concerts
Classical Music Concerts
Cinema
Ballet
0
2
Source: CACI
4
6
8
10
12
14
16
18
20
22
24
26
% of Adults
(iv) Games and Gambling
6.32
Gambling represents a significant element of the leisure industry. Growth and expenditure
on gambling is predicted to rise, particularly in the light of the proposed changes to the
Gambling Bill. The main components of the gambling industry and the potential for growth
both nationally and regionally, are briefly described below:
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North Norfolk District Council
Retail and Commercial Leisure Study 2005
•
Casinos – There were 123 casinos in the UK in 2002, operated by 16 companies. The
draft Gaming Bill proposed widespread relaxation of existing restrictions on the size and
nature of gambling venues within the UK and the promotion of ‘resort casinos’(7), which
were viewed as key drivers of the regeneration of depressed resort areas. However, the
final legislation initially scaled down the number of ‘resort casinos’ to just eight
regional locations. At the time of writing this report the Government has conceded that
it has cut this number to just one regional casino to ensure that the legislation is passed
ahead of the general election in May 2005. This regional casino will be a prototype in
order to assess its impact and its location will be decided upon by an independent panel.
•
Bingo Clubs – There were c.688 commercial bingo clubs in 2002. Legislative changes
in 2002 allowed for an increase in prizes in the larger clubs and the introduction of fruit
machines. The income from fruit machines currently represents the main area of
growth. Bingo operators are also marketing their clubs at a younger, predominantly
female audience, in order to increase admissions and market share. Interestingly,
Figure 6.6 shows that the participation of North Norfolk’s adult population is below the
national average. This may represent an opportunity to target bingo operators for some
of the District’s main centres, as DTZ is not currently aware of any demand from this
business sector.
•
Horse and Greyhound Racing – Horseracing is second only to football as the most
televised sport and accounts for c.70% of the turnover of betting shops. There are
currently 59 racecourses in Britain, compared to 32 licensed greyhound courses.
According to BISL figures, betting on horseracing was estimated to be £7.5bn in
2002/03 and £2.2bn on greyhounds.
Figure 6.6: Games and Gambling Participation in North Norfolk District v. Great Britain
Average
Greyhound Racing
Bridge
Ten Pin Bowling
Snooker
Darts
Football Pools
Game Machines
Chess
Bingo
Horse Racing
Betting
Billiards
0
Source: CACI
20
40
60
80
100
120
140
160
Index (GB average = 100)
(7)
A resort casino is a complex that includes hotel facilities, restaurants, bars, live entertainment, conference facilities
underpinned by an array of gambling facilities.
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(v) Hotels and Visitor Accommodation
6.33
There are approximately 22,000 hotels and guest houses registered with the tourist boards
within the UK with an additional 16,000 bed and breakfasts. The number of unregistered
establishments would bring the combined total up to 60,000.
6.34
The accommodation sector is largely cyclical and subject to economic trends. Following the
September 11th 2001 terrorist attack and the subsequent slowdown of the UK economy, the
market is slowly picking up on the back of increasing visitor numbers. According to
PricewaterhouseCoopers2 (PWC), 2006 may prove to be a record year for UK Revenue Per
Available Room (RevPAR3). The release of three years pent up demand for international
travel continues to drive tourism volumes upwards and hotel operators are benefiting from
the return of the business traveller. This latest forecast is underpinned by favourable global
macroeconomic conditions that continue to support the recovery in business and holiday
travel.
6.35
Turnover in the UK hotel industry is approximately £27bn4. Average room occupancy in
2002 was in the region of 70 per cent (74 per cent in London). According to Tri
Hospitality5, as at February 2005, occupancy in London was static at 73.8 per cent but
RevPAR went up 5.5%, and reached £65.94. UK provincial hotels saw a slide in occupancy
to 62.9% whilst RevPAR was up 3% to £40.83.
6.36
The problems faced by the major operators are in contrast to the more resilient independent
sector, together with budget and boutique operators. Budget hotels have been the key driver
of growth in this sector over recent years. In 2003 there were an estimated 9796 branded
budget hotels in the UK, an increase of 4.9% since 2002. The growth in the sector is
illustrated by buoyant transaction activity. Key deals over the last three years include:
•
•
•
Permira’s £712m acquisition of Travelodge
Six Continents demerger to form Intercontinental Hotels and Mitchells & Butler
Whitbread’s acquisition of Premier Lodge and the creation of Premier Travel Inn.
6.37
It is estimated that there will be an additional 6,000 rooms added by the end of 2005. For
example Days Inn has announced that it aims to have 100 hotels in the UK by the end of
2005 and Whitbread believes it can open 1,500 new rooms per year for the next five years.
6.38
In terms of new trends, the sector has also witnessed the launch of apartment hotels. For
example, InterContinental Hotels Group has launched the ‘Staybridge Suites’ brand. It
marks the introduction to the UK market of the first major hotel brand to focus on extendedstay guests (i.e. those who stay more than five nights).
6.39
In this context, North Norfolk’s hotel offer is largely dominated by the independent sector
as shown in Figure 6.7. Our research shows that the largest independent hotel is the
Blakeney Hotel with 64 rooms. In broad terms, DTZ believe this sector is likely to be
resilient, aided by the tourist orientation of many of the centres. Despite the dominance of
the independent sector there is the likelihood that branded budget sector operators could
also establish a presence in the future, given the large number of tourists who visit the North
Norfolk centres. However, based on our discussions with a number of key operators, the
2
PricewaterhouseCoopers regular Hospitality Directions Europe journal.
3
Revenue Per Available Room (RevPAR) is a key industry metric in the hotel industry which reflects demand. It is calculated
by multiplying a hotel’s average daily rate (ADR) by it occupancy rate.
4
British Hospitality Association
5
Tri Hospitality HotStats UK- March 2005
6
UK Budget Hotel Survey 2004 - Deloitte
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main obstacle to new investment and openings in North Norfolk is the industry’s perception
that the holiday market is too reliant on the summer season and that centres effectively
‘close down’ for half the year. For a hotel operator it is paramount to have an all year
opening to make it a financially feasible operation.
Figure 6.7: Hotel Provision in North Norfolk
Summary
6.40
DTZ’s research and market intelligence indicates that overall demand from commercial
leisure operators for representation in North Norfolk District and its main centres is
currently limited. This reflects the relative attraction, investment potential and customer
base of larger neighbouring centres in the region, particularly Norwich, Kings Lynn and
Great Yarmouth. Furthermore, most of the District’s centres lack the critical mass of retail
facilities and catchment populations to support major new leisure uses.
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7
Town Centre Futures: Key Findings and Recommendations
7.01
This concluding section draws together the main strands of the research and sets out our
findings and recommendations as to the future role and potential of North Norfolk District
and its main centres as shopping and leisure destinations.
7.02
Our recommendations are based on a thorough understanding of the strengths and
weaknesses of the District’s main centres, as well as the future potential opportunities for,
and constraints to, growth and development. Our analysis specifically draws on the
following main areas of research:
•
healthchecks and benchmarking assessments;
•
centre and household telephone interview surveys;
•
retail and leisure capacity assessments;
•
market demand analysis; and
•
appraisal of potential development opportunity sites.
7.03
The findings and recommendations are intended to inform the Council on the options and
broad strategy to help promote growth and manage change in its town centres, in
accordance with the main policies and principles set out in PPS6. This study will therefore
provide an important input to the Council’s preparation of its Local Development
Framework (LDF).
7.04
The following commentary briefly sets out the context for the regeneration and growth of
North Norfolk’s main centres at the strategic (District) level. It then provides a more
detailed outlook as to the potential future role and function of each of the District’s centres,
as well as the potential opportunities for growth and development.
North Norfolk District - Strengths, Weaknesses, Opportunities and Threats
7.05
North Norfolk District has a number of significant centres, all of which perform important
roles and functions, serving both the day-to-day shopping and service requirements of their
local resident catchment populations, as well as the broader needs of day-trippers and
tourists. The Local Plan (adopted in 1998) identifies the following hierarchy (or network)
of centres:
•
Fakenham, North Walsham, Holt and Cromer are defined as the four ‘principal’
town centres in the District based on the size and quality of their retail, service and
leisure offer. Fakenham and North Walsham are the largest traditional town centres in
the District and they have been identified as “growth towns”, capable of
accommodating most of North Norfolk’s development needs. Both Holt and the
coastal town of Cromer also function as important tourist and visitor destinations.
•
Sheringham, Stalham and Wells are defined as ‘smaller’ centres in the Local Plan,
with more limited development opportunities. Their retail offer is mainly orientated
towards the day-to-day convenience shopping needs of their local residents, although
both Sheringham and Wells also have important roles as coastal tourist and visitor
destinations.
•
Hoveton is identified as being a “unique centre”. It is an important gateway to the
Norfolk Broads and its retail offer is dominated by Roys supermarket and department
stores. It meets the day-to-day needs of its local residents and catchment population,
as well as serving both tourists and visitors to the Broads.
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7.06
Whilst this visitor and tourist market helps to underpin the vitality and viability of a
number of its centres (particularly Holt, Wells and Sheringham), it also creates significant
fluctuations in catchment populations and spend throughout the year. It is DTZ’s opinion
that one of the key ‘challenges’ facing the Council is to promote, co-ordinate and manage
more diverse and sustainable attractions in the District’s centres that will appeal to both
local residents, as well as generate year-round holiday destinations.
7.07
The following briefly summarises some of the other common issues and “challenges”
facing North Norfolk District and its centres:
•
“Grey” population profile– The District’s 2001 population of c.98,000 has a slightly
older age profile than the national average. For example, c.40% of its residents in
2001 were aged 55 years or more, compared to the national average of c.27%. This
reflects its coastal and rural location, and the fact that it also attracts people in their
retirement. This ‘greying’ of the population will have implications for the type of
retail, service and leisure offer demanded.
•
Lower affluence levels – The older age profile, and the fact that North Norfolk is
predominantly rural, largely explains the fact that it has fewer more affluent
households in social class group AB (19%) compared to the national average (25%).
As a result is has a higher proportion of less affluent C2’s (24%) than the GB average
(18%).
•
Mobile population - Car ownership in the District is higher than the national average.
In 2001 only 18% of households did not own a car, compared to 27.5% nationally.
This is also reflected by the fact that, on average, some two-thirds of respondents to
the centre surveys are car-borne. As the survey results show, it also means that
residents are able to travel to larger centres and stores outside of the District for their
main shopping and leisure needs, particularly Norwich.
•
Attractive town centres - Many of the District’s town centres and coastal resorts
benefit from attractive historic buildings and environments. In certain cases,
significant areas in these town centres are designated as Conservation Areas and there
are a relatively high proportion of Listed Buildings.
•
Popular tourist and visitor destinations – On average almost one-third of all
respondents interviewed in the District’s main centres lived outside of North Norfolk.
The impact of tourist and day-trip visitors (and spend) on the retail offer and overall
vitality and viability of some of the District’s centres is significant. For example, Holt
has a strong mix of higher order and speciality shops selling a range of goods,
including antiques, craft and gifts. However, as highlighted above, the local economy
of some of the District’s centres is probably too heavily dependent on seasonal holiday
patterns. This was confirmed by DTZ’s discussions with a number of budget hotel
operators, who indicated that they require year-round tourist, visitor and business trade
to be viable.
•
Important local shopping centres – In addition to catering for tourists and visitors,
the District’s centres also perform important roles and functions as local shopping
centres for their resident catchment populations. The vitality and viability of these
centres is largely underpinned by the convenience and service business offer, as this is
an important generator of frequent day-to-day trips. It is therefore vitally important
that the food and convenience offer in all the District’s centres is maintained and
enhanced.
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•
Declining status at regional and national level – Cromer, Fakenham, Sheringham
and North Walsham have all experienced declines in their national rankings since
1999. In contrast, Norwich is a top 10 shopping location in the UK and has increased
its ranking over recent years due to new investment and development. The opening of
the Chapelfields shopping centre in Autumn 2005, which will be anchored by House
of Fraser, will further strengthen Norwich’s retail offer. King’s Lynn will also benefit
from a 10,000 sq.m extension to the Vancouver Centre.
•
Poor supply of large modern shop units - Apart from Hoveton (and to a lesser extent
North Walsham), the retail offer in all the District’s centres is characterised by smaller
shop units. This is because many of the District’s centres are designated as
Conservation Areas and comprise significant numbers of Listed Buildings, which
limits their physical capacity to accommodate significant new development.
•
Under-provision of multiple retailers - There is a limited choice of larger multiple
retailers and department/variety stores in the District’s main centres. Roys in Hoveton
and North Walsham, along with the Aldiss and Bettys stores in Fakenham are the only
(independent) department stores. Woolworths is the only major national multiple
retailer with wider representation in the District’s centres (for example, in Fakenham
and North Walsham).
•
“One-dimensional” retail offer - The District has a good provision of stores and
outlets catering for the local day-to-day needs of its population, but the comparison
goods (and specifically fashion) offer is mainly orientated towards mid-range and
value products. Only Holt functions as a more specialist/niche centre, with a range of
higher order comparison goods shops. Respondents to both surveys identified the
need for a better choice of quality clothing and fashion shops in most of the centres.
•
High ‘leakage’ of fashion spend - The results of the household survey indicate that
Norwich attracts almost half of all respondents in the ‘core’ (District) area for yearround fashion shopping purchases (i.e. clothing and footwear), with Great Yarmouth
(8%) and Kings Lynn (5%) achieving smaller, but still significant, market shares.
Significantly, Norwich’s market share for Christmas and special occasion shopping
increases to over 60%. This reflects the limited offer in the District’s main centres.
•
High ‘leakage’ of other comparison goods spend – According to the survey,
Norwich’s retail warehouses and larger stores also attract a significant proportion of
people living in North Norfolk for their main ‘bulky good’ purchases. For example
Norwich attracts, on average, over one-fifth of trips for furniture/carpets, large
electrical goods and DIY/hardware from the ‘core’ (District) area.
•
Increasing pressure for out-of-centre development - The only retail warehouse
provision in the District is the North Norfolk Retail Park in Cromer and the Focus
Wickes store at Fakenham. The increasing ‘leakage’ of trips and spend to retail
warehouse stores and parks outside the District, particularly in Norwich, combined
with the under-supply of large modern units in the District’s town centres, will
inevitably lead to increasing pressures for new out-of-centre development across the
District. This will represent a major “challenge” to the Council.
•
Under-provision of quality cafés, bars and restaurants – The research evidence
appears to indicate that there is an opportunity to enhance the quality of the eating and
drinking offer in most of the District’s centres to meet the needs of the local
population, as their well as tourists and day visitors. In turn, this will help to create
more diverse and thriving daytime and evening economies.
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•
Vacancy levels – Vacancy levels in the District’s centres are generally below the
national average of 11%. However, DTZ understand that short-term vacancies do
increase in some of the centres outside of the holiday season, as some shops and
service businesses close during the quieter periods. Although these seasonal vacancies
are short-term and do not therefore represent a significant threat to the overall vitality
and viability of some of the District’s centres (so long as this remains the case), it
nevertheless emphasises the need to create year-round attractions to improve the
overall viability and performance of centres.
•
Perceived parking and traffic problems - The market research and stakeholder
consultations highlighted that a high proportion of respondents perceive parking
provision in the District’s main centres to be poor and/or too expensive. For example,
one-fifth of respondents to the centre surveys identified the difficulty in finding a
parking space and the cost of parking. However, there is a caveat to the research
findings, as the surveys were conducted during the holiday season, when the demand
for parking and congestion in the District’s centres is at its peak.
•
Commercial leisure offer - Cromer and Fakenham are the only centres in the District
with a mainstream cinema offer. They attracted almost one-quarter of all respondents
within the ‘core’ area on their “last trip” to the cinema. Sheringham’s smaller cinema
(‘The Little Theatre’) attracted less than 1% of trips. In comparison, Norwich’s larger
and more modern multiplex cinemas drew over one-third of all respondents across the
study area on their “last trip”.
•
Evening economy - The household survey indicated that almost half of all
respondents within the ‘core’ (District) area visit the District’s local towns and
villages for an evening out and a further 15% travel into the District. North Walsham,
Cromer and Fakenham are the most popular evening destinations in the District, each
drawing 7% - 11% of all respondents living in the ‘core’ area. Norwich also attracts
13% of respondents from the ‘core’ (District) area for an evening out. Nevertheless,
DTZ consider that there is potential to improve the quality and offer of the evening
economy in some of the District’s main centres, particularly by attracting better
quality restaurants, cafés and bars.
•
Limited development opportunities – The fact that many of the town centres are
covered by Conservation Areas and many of the shops are in Listed Buildings, means
that it is difficult to identify sequentially preferable sites in these centres that are
suitable, viable and likely to be available over the short to medium term (i.e. a five
year period). This places significant constraints on the potential for new retail and
mixed use development to provide the large modern units that multiple retailers
require.
•
Limited market demand – Partly as a result of the poor supply of larger shop units,
current requirements from national comparison goods retailers and commercial leisure
operators for representation in the District’s main centres is poor. At present the main
demand is from value retailers, which reflects the current retail mix and demographic
profile of North Norfolk, as well as for out-of-centre food and non-food retailing.
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North Norfolk District - Retail Futures
7.08
In order to determine the potential quantitative capacity ranges for new comparison and
convenience goods retailing up to 2011 and 2016, DTZ has tested a number of different
‘growth’ scenarios (see Table 7.1).
Table 7.1
Comparison and convenience goods retail capacity assessments, 2004 – 2016
Scenario Testing
Annual
Spend
Growth
Population
Growth
2004 - 2016
Annual
‘Efficiency’
Growth
Scenario 1 / 1(a):
0.3%
4.2%
0.1% / 0%
-
Scenario 2 / 2(a):
0.9%
4.2%
0.3% / 0%
-
Scenario 3 / 3(a):
0.9%
10.5%
0.3% / 0%
-
Scenario 1 / 1(a):
4.4%
4.2%
1.5% / 2.5%
-
Scenario 2 / 2(a):
4.4%
10.5%
1.5% / 2.5%
-
Scenario 3 / 3(a):
4.4%
4.2%
1.5% / 2.5%
Constant
Market Shares
‘Claw Back’
CONVENIENCE GOODS:
COMPARISON GOODS:
Notes:
X
5%
(1)
The total population growth of +4.2% results from the County Council’s ‘Policy-based’
forecasts.
(2)
The total population growth of +10.5% results from the ONS projections.
7.09
These scenarios are based on robust forecasts of spend and population growth up to 2016,
and the likely ‘productivity’ (or ‘efficiency’) growth of existing floorspace (as required by
PPS6). Although we assume constant market shares over the forecast period, we also test
the (hypothetical) potential for the District’s three principal centres (Fakenham, Cromer
and North Walsham) to increase their overall non-food market shares by c.5% up to 2016
(Scenario 3). This is based on the reasonable assumption, in our judgement, that
quantitative and qualitative improvements to their overall retail and leisure offer will help
to ‘claw back’ a proportion of the shoppers and spend currently ‘leaking’ to larger centres
and stores outside the District, particularly Norwich’s city centre and out-of-centre shops
and stores.
7.10
The headline findings of the capacity assessment for comparison and convenience goods
retailing is described below:
(i) Comparison Goods Capacity Assessment
7.11
DTZ’s forecasts indicate significant capacity for new comparison goods retailing up to
2016. This reflects the strong forecast growth in average non-food spend of 4.4% per
annum, based on historic national trends, and the fact that the only new comparison goods
space in the planning pipeline is the 2,396 sq.m net out-of-centre Focus DIY store in North
Walsham, which is currently under construction.
7.12
Table 7.2 sets out the ‘global’ (District-wide) forecasts of residual comparison goods spend
available over the forecast period, inclusive of new commitments. Table 7.3 also provides
the range of forecasts for new net non-food retail floorspace, based on average sales
densities of £4,000 and £6,000 per sq.m. The key results are briefly reviewed below:
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Table 7.2
Revised net comparison goods residual spend forecasts, 2004 – 2016
Strips out the potential turnover of new commitments
£ million
2004
2008
2011
2016
Scenario 1:
0
19.5
43.8
95.3
Scenario 1(a):
0
10.9
27.9
65.1
Scenario 2:
0
25.0
55.3
120.1
Scenario 2(a):
0
16.3
39.1
89.5
Scenario 3:
0
25.4
58.2
126.3
Scenario 3(a):
0
17.0
42.5
96.5
Source: DTZ Re:Map (Stage 8)
Table 7.3
Comparison goods floorspace capacity, 2004 – 2016
Assumes an average sales density for new non-food space of £4,000 - £6,000 per sq.metre
Net square metres
2004
2008
2011
2016
Scenario 1:
0
3,100 - 4,600
6,600 - 9,900
13,300 - 19,900
Scenario 1(a):
0
1,600 - 2,500
3,900 - 5,900
8,100 - 12,100
Scenario 2:
0
3,900 - 5,900
8,300 - 12,500
16,700 - 25,100
Scenario 2(a):
0
2,500 - 3,700
5,500 - 8,200
11,100 - 16,600
Scenario 3:
0
4,000 - 6,000
8,700 - 13,100
17,600 - 26,400
Scenario 3(a):
0
2,600 - 3,800
6,000 - 8,900
12,000 - 17,900
Source: DTZ Re:Map (Stage 8)
•
Scenarios 1 and 1(a): ‘Baseline’ – Based on the County Council’s ‘policy-led’
population projections and an ‘efficiency’ growth rate of +1.5% per annum for existing
businesses and floorspace, DTZ forecast a residual spend of c.£44m at 2011, rising to
c.£95m by 2016 (Scenario 1). The higher ‘efficiency’ growth rate effectively reduces
the residual spend to c.£30m in 2011 and c.£65m in 2016 (Scenario 1a). Based on
DTZ’s robust assessment that new non-food floorspace could achieve average sales
densities of between £4,000 and £6,000 per sq.m in 2004 (at constant 2001 prices), we
forecast the capacity for 8,100 – 19,900 sq.m net of new comparison goods floorspace
by 2016.
•
Scenarios 2 and 2(a): ‘Higher Population Growth’ – Testing the higher ONS
population projections, and the different annual ‘efficiency’ growth rate assumptions,
results in a residual spend of c.£39m - £55m at 2011, rising to c.£89 - £120m by 2016.
This is equivalent to a floorspace capacity of between 11,100 – 25,100 sq.m net.
•
Scenarios 3 and 3(a): ‘Regeneration and Development’ – This scenario assumes that
North Walsham, Cromer and Fakenham are able to cumulatively increase the District’s
overall retention level based on qualitative and quantitative improvements to their
retail offer. Testing the different annual ‘efficiency’ growth rate assumptions results in
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a residual spend of c.£42m - £58m by 2011, rising to c.£96m - £126m in 2016. This is
equivalent to a floorspace capacity of between 12,000 – 26,400 sq.m net, depending on
whether the new floorspace trades at average sales densities of between £4,000 –
£6,000 per sq.m.
7.13
DTZ do not provide a detailed breakdown of the capacity forecasts on a centre-by-centre
basis, as we believe such allocations can be overly prescriptive and reduce the flexibility
for local authorities to plan for new development at the strategic (District) level. For
example, it is clear that some of North Norfolk’s centres do not have the physical capacity
to accommodate new retail floorspace (such as Holt).
7.14
DTZ therefore recommend that this ‘pent-up’ quantitative capacity should be allocated to
other centres in the District, which have broadly overlapping catchment areas, whilst at the
same time promoting qualitative improvements to the ‘physically constrained’ centres. On
this basis, Table 7.4 sets out the net floorspace capacity forecasts by broad geographic
areas.
Table 7.4
Comparison goods floorspace capacity, 2004 – 2016
Scenarios 1 – 3 only
Assumes an average sales density for new non-food space of £4,000 - £6,000 per sq.metre
Net square metres
Fakenham / Wells
Cromer / Sheringham / Holt
North Walsham / Stalham / Hoveton
TOTAL:
Notes:
2008
2011
2016
940 – 1,700
2,020 – 3,900
4,070 – 8,600
1,740 – 3,200
3,160 – 6,100
5,860 – 11,300
380 – 1,000
1,400 – 3,000
3,350 – 6,500
3,060 – 5,900
6,580 – 13,000
13,300 – 26,400
(1)
Test an annual ‘efficiency’ growth rate for existing businesses and floorspace of +1.5%.
(2)
Figures may not sum due to rounding.
7.15
DTZ also recommend that a significant proportion of this forecast floorspace should be
concentrated in the District’s ‘principal’ and ‘growth’ centres, as they currently have the
critical mass of existing facilities and catchment populations to support sustainable new
developments. In particular, DTZ consider that the District’s two ‘growth’ centres
(namely North Walsham and Fakenham), along with Cromer, represent the optimum
locations for major new retail and mixed use development in the District, particularly in
the context of the current scale and character of their retail offer.
7.16
Maintaining and enhancing the retail, leisure and service offer in these centres will help to
reinforce their roles as the District’s main shopping destinations, whilst also stemming
some of the ‘leakage’ of shoppers and spend to larger neighbouring centres. DTZ’s broad
appraisal of potential development sites in these main centres has also indicated the
opportunities for new retail and mixed use development, as well as the potential constraints
to development (such as land ownership and assembly issues). Although more detailed
planning and development appraisals/briefs are required, DTZ nevertheless advise the
Council that there is the potential to accommodate a significant proportion of the identified
retail capacity in the main centres of Fakenham, North Walsham and, possibly, Cromer.
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(ii) Convenience Goods Capacity Assessment
7.17
DTZ’s analysis indicates that there is more limited forecast capacity for new convenience
goods retailing in North Norfolk up to 2016. This is mainly explained by the fact that:
•
There is minimal forecast growth in average spend levels (+0.3%/0.9% per annum) up
to 2016.
•
There is a significant quantum of new food and convenience goods space in the
planning pipeline, either with permission or proposed.
•
DTZ believe that there is more limited potential to increase the current estimated
‘retention level’ for convenience goods retailing.
•
There is also limited evidence to indicate that the District’s centres and stores are
‘over-trading’ at the base year. Based on DTZ’s research there is therefore no
evidence of additional ‘pent-up’ capacity at 2004.
7.18
Table 7.5 summarises DTZ’s forecasts of the ‘global’ (District-wide) residual spend
available for new convenience goods floorspace up to 2016.
7.19
Please note that the planning permission for the 390 sq.m net extension to the Morrisons
store in Fakenham comprises a condition that will allow up to 20% of the store’s total sales
area to be set aside for non-food retailing. As a result, the extended foodstore will have a
reduced convenience goods sales area after extension (2,072 sq.m) than before (2,112
sq.m), and its net comparison goods offer will increase from c.88 sq.m to 518 sq.m net
(20% of total sales area). All things being equal the net impact of this extension will be to
slightly increase the net residual spend available over the forecast period by c.£0.4m. This
has therefore been added to the residual spend forecasts set out in Table 7.5 below.
7.20
Based on the different annual spend forecasts, and assuming that existing businesses will
achieve turnover ‘efficiency’ in accordance with the advice set out in PPS6, DTZ forecast
a residual spend of between £9m - £31m in 2016 (in constant 2001 prices). The lower
forecast residual spend in Scenario 1 is based on the lower spend and population growth
forecasts. The higher forecast residual spend in Scenario 3 is derived from the higher
spend and population growth.
Table 7.5
Revised net convenience goods residual spend forecasts, 2004 – 2016
Strips out turnover potential of any new commitments
£ million
2004
2008
2011
2016
Scenario 1:
0
3.2
5.3
9.0
Scenario 2:
0
5.9
10.2
17.8
Scenario 3:
0
9.8
17.3
30.9
Source: DTZ Re:Map (Stage 8b)
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Table 7.6
Convenience goods floorspace capacity, 2004 – 2016
Net square metres
2004
2008
2011
2016
Scenario 1:
0
300 – 600
500 – 1,100
900 – 1,800
Scenario 2:
0
600 – 1,200
1,000 – 2,000
1,700 – 3,400
Scenario 3:
0
1,000 – 1,900
1,700 – 3,400
3,000 – 6,000
Source: DTZ Re:Map (Stage 8c)
7.21
Depending on the type of foodstore proposed and their potential company average sales
densities1, DTZ has identified the following broad planning and development options for
new convenience goods floorspace in the District up to 2016:
•
Scenario 1: ‘Baseline’ – The lower spend growth scenario indicates that there is
sufficient residual spend at 2016 (c£9.0m) to support the combined forecast turnover
of both the Budgens stores in Sheringham and Wells (c.£5.7m). DTZ also assume
(based on the District Council’s advice) that the proposed extension to the other
Morrisons store in Cromer will actually result in a fall in its overall convenience goods
sales area, assuming a similar planning condition to the Fakenham store allowing up to
20% of the store’s total sales area to be set aside for non-food retailing. In this case,
therefore, DTZ forecast that the new store format will not increase its convenience
goods turnover and that the extension could (all things being equal) lead to a potential
reduction in its overall turnover by c.£0.33m. On this basis DTZ forecast that there
will also be the quantitative capacity for the Morrisons extension under Scenario 1,
although this store and other proposals will clearly need to be assessed on the basis of
the key considerations set out in PPS6 (see paragraph 3.4). This would leave a
residual spend of c.£3.3m, which DTZ believe could support a smaller discount food
retailer, or possibly a foodstore extension. There is not the capacity, according to this
scenario, to support either of the Tesco proposals.
•
Scenario 2: ‘Higher Spend Growth’ - The net residual spend forecast at 2011 of
c.£10.2m will support both the Budgens stores proposed in Sheringham and Wells, as
well as the Morrisons extension. At 2016 the net residual spend of c.£17.8m will
support the Tesco proposal in Sheringham and one of the Budgens stores (but not both
Budgens stores), along with the Morrisons extension. Alternatively, the forecast
residual spend at 2016 could support the Tesco proposal in Fakenham and the
Morrisons extension, but no other foodstore proposals.
•
Scenario 3: ‘High Spend and Population Growth’ – This scenario will generate
sufficient residual spend at 2011 (c.£17.3m) to support the Tesco store in Sheringham
and one of the proposed Budgens stores in Wells or Sheringham, along with the
Morrisons extension. At 2016 the net residual spend is forecast to increase to
c.£30.9m and DTZ believe that this could sustain one of the following development
options:
1
DTZ assume a ‘discount’/’value’ foodstore will achieve an average sales density of c.£5,000 per sq.m in 2004 (at constant
2001 prices) and a ‘top six’ multiple foodstore will achieve an average sales density of at least £10,000 per sq.m.
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i. either one of the Tesco proposals in Sheringham or Fakenham (but not both),
along with both of the proposed new Budgens stores in Wells and
Sheringham, as well as the Morrisons extension; or
ii. the Morrisons extension and possibly both the Tesco proposals, although DTZ
forecast that their combined turnovers could exceed the residual spend by
c.£1.7m.
7.22
DTZ advise the Council that foodstores are key anchors that underpin the vitality and
viability of many smaller and medium-sized centres, as they are significant generators of
footfall. Clearly new development should be focused in the most sustainable locations,
namely town centres, where they will help to maintain and enhance the retail offer. The
development of new, larger foodstores on the edge or outside of town centres could have a
detrimental impact on the overall vitality and viability of the town centre, if there are no
strong pedestrian linkages between the different shopping destinations.
Leisure Futures
7.23
In DTZ’s experience, it is much more difficult to quantify the capacity for new commercial
leisure facilities (such as cinemas and health & fitness clubs), as robust methodologies do
not currently exist that can translate the growth in the different elements of leisure spend
into floorspace capacity estimates. For this reason, DTZ has relied more on the qualitative
findings of the healthchecks, market research surveys and market demand appraisals to
provide a more realistic assessment of the capacity and need for new commercial leisure
facilities across North Norfolk District.
7.24
Nevertheless, it is clear that spending on leisure pastimes has grown at a substantially
higher rate than spending on shopping, particularly food shopping, which is the traditional
mainstay of town centre economies. Leisure spending – and growth – is also particularly
high in relatively affluent and mature town centre catchment areas. A large part of the
growth is in forms of leisure not normally found in town centres (e.g. holidays and
education). However, other growth is occurring in facilities that are within, or capable of
being accommodated in town centres – such as cafés and restaurants, take-away shops,
cinemas and health and fitness centres. As a result, there is going to be continuing
pressures from the leisure industry, and indeed from the public, for town centres to provide
flexible and innovative leisure formats. This flexibility will cover not only the mix of uses,
but also other issues such as opening hours and accessibility.
7.25
In the past planning policies for commercial leisure have generally lagged behind the
dynamic growth in leisure spending and new development. Policies have tended to be
either neutral or negative, and many development plans do not even contain policies that
specifically promote (or protect) leisure uses in town centres. This ambivalence has been
slowly eroded over recent years as strategic and local policy–makers have realised the
significant social, cultural and economic value that can be derived from many of the leisure
uses found in town centres, particularly cinemas, cafés and restaurants.
7.26
Significantly, PPS6 contains several key polices and principles that represent strong policy
direction to planners, developers and investors alike. As with new retail development, all
leisure uses are subject to sequential testing, need, capacity and environmental
assessments. These tests are consistent with achieving more sustainable patterns of leisure
development and focusing new investment in town centres. PPS6 also advises local
planning authorities to prepare planning policies to help manage the evening and nighttime economy in appropriate centres. It states that these policies should encourage “…a
range of complementary evening and night-time economy uses which appeal to a wide
range of age and social groups, ensuring that provision is made where appropriate for a
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range of leisure, cultural and tourism activities, such as cinemas, theatres, restaurants,
public houses, bars, nightclubs and cafés” (para. 2.23). However, it is also important that
local authorities consider the scale of leisure development they wish to encourage and their
likely impact, including the cumulative impact on the character and function of the centre,
anti-social behaviour, crime and the amenities of nearby residents.
7.27
Research studies have also underlined the important role of leisure uses in supporting other
town centre functions, creating an evening economy, meeting the objectives of social
inclusion and stimulating regeneration. Apart from cinemas and health & fitness clubs, the
new types of town centre leisure enterprise are predominantly based on the entertainment,
food and beverage markets. Although they are not individually of economic significance,
these clusters of leisure-based activities are capable of contributing positively to the
economic regeneration and image of centres, provided that they are carefully controlled
and managed. For example, research shows that the concentration of leisure attractions
and entertainment venues in Reading town centre has had a profound impact on the urban
area as a whole, particularly in contributing to the image of the town as a significant
regional centre2.
7.28
Leisure-led regeneration has also been occurring on a more modest scale in many of the
UK’s smaller cities and towns. Many local authorities now have development plans with
policies in place that support the creation of leisure ‘quarters’ or ‘zones’ within urban
centres. In these ‘quarters’ leisure and entertainment uses are grouped together to create
synergy and attract footfall, thereby helping to develop and reinforce the evening
economy. The promotion of leisure uses, particularly when linked to the development of
the evening economy, can also have a beneficial impact on a town centre’s economic
performance, environment and public realm, by making them safer and more attractive
places for inward investment. For example, research on the ‘24-hour city’ shows that by
increasing the range of town centre attractions and entertainment venues, more people will
visit – or stay after work – so generating increased spending in the local economy3.
7.29
Thus, if the planning process is to encourage and direct development into urban areas, we
recommend that North Norfolk District adopt proactive policies, in accordance with the
advise set out in PPS6. Flexible policies are therefore required to accommodate the
uncertain leisure concepts that could emerge over the next decade. Policies should be
aimed at encouraging leisure development that will help sustain the vitality and viability of
town and district centres. It should also be acknowledged that such developments may
help to replace some of the former retail activities that have been lost to the larger town
centres, as well as out-of-centre locations. Policies will be most effective where they both
encourage new investment, but yet control the harmful excesses and impacts of any
development.
7.30
Although the smaller centres in North Norfolk will not be able to offer, or attract, a wide
range of leisure activities, the encouragement of quality cafés and restaurants can still add
new life and vibrancy to these centres. DTZ has forecast the quantitative capacity for new
A3/A4/A5 facilities based on the reasonable assumption that they generally represent
between 20%-30% of the offer in new retail-led mixed use developments.
2
Leisure, Property and the Viability of Town Centres, Neil Ravenscroft, Joe Reeves, Martha Rowley in Environment and
Planning A 2000, Volume 32, Pages 1359 to 1374
3
Heath.T & Stickland.R, (1997) “The 24 hour city concept”, in Safer City Centres: Reviving the public realm, editors T.OC, and
S.Tiesdell (Paul Chapman: London, pages 170 to 183)
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7.31
Based on Scenarios 1 – 3 (which test the lower ‘efficiency’ growth rate of +1.5% per
annum), Table 7.6 shows the potential capacity for A3/A4/A5 floorspace of 2,660 sq.m 7,920 sq.m net at 2016. For Scenarios 1(a) – 3(a) (which test the higher ‘efficiency’
growth rate of +2.5% per annum), the floorspace capacity ranges from 1,620 – 5,370 sq.m
net.
Table 7.6
Commercial leisure floorspace capacity (A3 / A4 / A5 uses only) 2004 – 2016
Assumes an average sales density for new non-food space of £4,000 & £6,000 per sq.metre
Net square metres
2004
2008
2011
2016
Scenario 1:
-
620 - 1380
1,320 – 2,970
2,660 – 5,970
Scenario 1(a):
-
320 - 750
780 – 1,770
1,620 – 3,630
Scenario 2:
-
780 – 1,770
1,660 – 3,750
3,340 – 7,530
Scenario 2(a):
-
500 – 1,110
1,100 – 2,460
2,220 – 4,980
Scenario 3:
-
800 – 1,800
1,740 – 3,930
3,520 – 7,920
Scenario 3(a):
-
520 -1,140
1,200 – 2,670
2,400 – 5,370
Source:
DTZ Re:Map (Stage 9)
Notes:
The lower floorspace capacity forecast is based on an average sales density for new comparison
goods floorspace of £6,000 per sq.m and assumes that an additional 20% of net space could be for
supporting A3/A4/A5 uses.
The higher floorspace capacity forecast is based on an average sales density for new comparison
goods floorspace of £4,000 per sq.m and assumes that an additional 30% of net space could be for
supporting A3/A4/A5 uses.
7.32
As with our retail capacity assessments, DTZ has not provided a breakdown of the
forecasts on a centre-by-centre basis, as we believe such allocations can be overly
prescriptive and reduce the flexibility for local authorities to plan for new development at
the strategic (District) level. Nevertheless, our research has highlighted the fact that the
District needs to enhance and modernise the quality of its commercial leisure uses,
particularly its café, restaurant and bar offer. However, this has to be balanced with the
need to protect the historic nature of the North Norfolk coastline and the attraction of its
traditional holiday resorts.
7.33
In terms of the District’s cinema offer, Cromer and Fakenham are the only centres with
cinemas. The surveys indicate that, together, they are achieving a market share of “last
trips” to the cinema of c.23% from within the ‘core’ (District) area. In comparison,
Sheringham’s smaller cinema (The Little Theatre) draws less than 1% of trips, whereas
Norwich’s larger multiplex cinemas attract over one-third (35%) of all respondents. It is
widely recognised (and researched) that cinemas are important anchors to the leisure offer
in town centres. However, the cinema sector is currently experiencing a period of
consolidation, after dramatic growth and expansion during the 1990s. Although a number
of smaller cinema operators are still targeting town centre locations, it is clear from DTZ’s
market demand analysis that there is presently no requirement for additional new cinemas
in North Norfolk. However, if demand does occur over the medium to longer term, DTZ
recommend that the Council should direct proposals for a new cinema to North Walsham
town centre, as the District’s population to the east do not currently have easy access to a
cinema.
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7.34
The recent shake-up in the health and fitness industry, has led to increased consolidation
across the sector. Nevertheless, DTZ consider that there could be increased national
demand for such facilities over the medium to long term, either on their own or as part of
mixed use developments. Planning authorities should look to shape the location of these
new facilities to meet under-provision and ‘need’ in certain locations, by identifying
potential opportunities as part of mixed-use developments or the conversion of existing
buildings in these centres.
7.35
The transformation of retailing into a leisure activity and the extension in leisure time
leading to the “24 hour city” offer opportunities for smaller cities and town centres, but
they also pose threats. The issue is whether the smaller centres can accommodate the size
and intensity of development that these formats require, or whether alternatives can be
developed that are more amenable to the specific circumstances of those centres. In some
cases, leisure uses will involve the conversion of existing premises rather than being a net
addition to the commercial use of town centre space. This conversion is typically from
secondary and tertiary retail units, and whilst this may not be a major issue for large towns
and cities, where a significant core of retail space is likely to remain in the central area, it
can pose problems for smaller towns. This is a particular cause for concern if the core
shopping area is allowed to contract and the conversion from secondary retail to leisure
uses undermines the critical mass of retailing needed to attract customers.
7.36
The Licensing Act has further reinforced the promotion and management of the evening
economy. This has moved control of licensing from Magistrates to Councils and from
summer 2005 will enable “24-hour” licensing. The Government anticipates benefits in
terms of improvements to vitality, jobs, expansion of leisure venues, attracting inward
investment and new residents, and a reduction of “binge-drinking”. However the evening
economy can also give rise to conflicts with other town centre occupiers and the Civic
Trust is conducting a three-year program into how to make evening and night time
economies work effectively. This has identified lack of late night transport, litter, fouling
of streets and the need for extra policing as the key problems.
7.37
The expansion of leisure and tourist uses in town centres will therefore need to be carefully
planned, managed and monitored. PPS6 recommends that local planning authorities
should consider developing: “…a local strategy for the evening and night-time economy
which, when co-ordinated with other local strategies, tackles a range of issues from antisocial behaviour and crime prevention to adequate late night transport provision to
support these activities”(para.2.25). The ODPM has also launched a ‘How To’ programme
to work with leaders and practitioners in developing solutions and tools for delivering
cleaner, safer, greener public spaces and town centres. This will address a range of issues
including
managing
the
evening
and
night-time
economy
(see
www.cleanersafergreener.gov.uk).
7.38
Looking forward, North Norfolk must also look to challenge (but not replicate) the
competing holiday leisure offers throughout Europe that have been opened up by the lowcost airlines. The challenge is to make North Norfolk preferential to a long weekend in
Spain or France. Currently such destinations appeal more to most holiday-makers, as the
profile of such destinations is of a more modern and diverse “24-hour” leisure offer.
7.39
At a national level, the issue of how to safeguard the future prosperity of seaside resorts
and towns, such as Cromer and Sheringham, has been given prominence by the publication
of the “Shifting Sands” report by English Heritage and the Commission for Architecture
and the Built Environment (CABE, 2003). This study showcased 14 seaside towns that
have regenerated themselves and highlights good practice as a way for other towns to
benefit. In particular, the research highlighted the need for partnership-working and a
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range of measures are identified as key factors if, for 12 months of the year, seaside towns
are to be successful, including:
•
•
•
•
•
•
7.40
7.41
good/improved transport connections
key visitor attractions
(safe) evening economy
clean beaches and water
opportunities for new business and creation of real jobs
opportunities for affordable housing
In the ‘best practice’ examples highlighted there was usually one significant factor that has
driven the renaissance of the case study coastal towns, ranging from the opening of The
Tate in St. Ives to the restoration of the de La War pavilion in Bexhill. The research has
identified a number of key lessons for the renaissance of other coastal resort towns,
including:
•
The need for a strong and robust vision and strategy
•
The identification of a series of zoned areas and foci for future development
•
The need to work with designers to generate ideas
•
The need to adapt policies and practices to promote design quality.
Although beyond the scope of this study, DTZ also recommend that there is significant
scope to co-ordinate and improve the management, branding and marketing of the
District’s coastal resorts and visitor attractions.
Town Centre Futures
7.42
PPS6 has reinforced the Government’s policy and thinking that town centres are priority
locations for new growth and development, and its commitment to the creation of
successful, thriving, safer and inclusive communities. Research by the DETR (2001)
concluded that to remain vital and viable (that is, successful and sustainable alternatives to
out-of-centre leisure developments), town centres require: “…constant renewing and
updating of infrastructure including tourism and leisure facilities. Without this continuing
investment, their competitive position will worsen, even though this may be disguised
whilst growth in leisure spending is strong”.
7.43
This is particularly relevant to North Norfolk and its main centres, as it faces increased
competition and challenges from larger regional centres, specifically Norwich, as well as
pressures for new out-of-centre development. The District’s centres need to respond by
providing a complementary mix of uses, within a framework of strong management.
People are now demanding environments with a range of offers – not just shopping, but
entertainment, experiences and facilities. Future shopping patterns will be leisure and
interest-led, and consumers will shop where the best experiences are on offer. Shopping
centre and town centre investors and managers need to embrace these trends and be more
imaginative if they are to maintain market share.
7.44
In this context, the following commentary provides a broad overview of DTZ’s high level
strategy for the future growth of the District’s main centres as retail, leisure and service
business destinations.
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(i) Fakenham
7.45
Fakenham is one of the principal town centres in the District. It is North Norfolk’s largest
shopping centre and it benefits from an attractive historic core. It functions as a busy
commercial centre and also acts as a hub for surrounding smaller centres and villages. The
weekly markets and the monthly farmers market, also attract people to the centre from
beyond its local catchment area. Its wider attraction is reflected by the fact that the survey
shows that it draws approximately two-fifths of its visitors from beyond a twenty minute
drive time area.
7.46
However, the town does have a number of weaknesses. For example, it is ranked 1,063rd
out of 1,500 centres in the UK and has fallen some 300 places in the national rankings
since 1999. This largely reflects the improvement in similar ranked centres and the lack of
new investment in the centre over recent years. It also has:
•
a relative lack of quality comparison goods shops, particularly fashion retailers;
•
an under-provision of convenience retailers in the town centre, as the main foodstores
are located out-of-centre (i.e. Morrisons and Co-Op);
•
limited market demand; and
•
perceived difficulties of finding parking spaces;
7.47
This ‘gap’ in its higher order comparison goods and fashion offer means that a relatively
high proportion of its local catchment population are travelling longer distances to larger
neighbouring centres outside the District (i.e. Norwich and Kings Lynn) to meet their
needs. The centre survey shows, for example, that over two-fifths of respondents regularly
shop in other centres for their main comparison goods purchases.
7.48
Fakenham is also one of the most popular centres in the District for an evening out and its
cinema is an important anchor to the nightime economy. Although the centre has a
relatively good provision of restaurants (particularly Chinese and Indian), there does
appear to be an ‘gap’ in terms of quality bars and restaurants.
7.49
The Council’s policy and regeneration strategy is to focus new growth in Fakenham (and
North Walsham). The increasing population and its existing critical mass of retail, service
and leisure uses provide the foundations for new investment and development. However,
the physical expansion of Fakenham is constrained by its historic and built environment,
which limits the opportunities for new development. The failure to provide for an element
of the growth and capacity identified will inevitably have implications for the town
centre’s existing shops, as Fakenham will fail to ‘claw back’ the increasing proportion of
shoppers and spend that is ‘leaking’ to larger centres and stores outside the District. This
could also lead to pressures for new out-of-centre retailing. Nevertheless, DTZ has
identified potential opportunity sites for new retail and mixed used development in the
town centre, although more detailed analysis is required (see Volume 4).
7.50
Although Fakenham’s role and offer should primarily be focused on meeting the needs of
its local population, DTZ believe there is also a significant opportunity to increase its
tourist and visitor potential. The town acts as a ‘gateway’ to North Norfolk and the
racecourse and museum are popular attractions. Although they generate significant trips to
the area, the linkages with the town centre are poor. Improvements to signage and parking
facilities, along with improved marketing and branding of the town’s daytime and evening
attractions (including its cinema and vibrant market) could help to increase the frequency
of visits from locals, tourists and visitors.
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(ii) North Walsham
7.51
North Walsham lies in the east of the District, and is an identified growth centre along with
Fakenham. The core shopping activity in the centre is focused on Market Place and
adjoining streets. The historic character of the centre, with St. Nicholas’s Church at its
heart, has resulted in an attractive environment and popular shopping destination.
7.52
North Walsham is ranked behind Fakenham in terms of its total floorspace and multiple
offer. It is an attractive traditional market town that primarily serves the everyday
convenience and service needs of its local population. It is a less significant tourist and
visitor destination, drawing under one-fifth of respondents to the centre survey from
beyond a twenty minute drive time.
7.53
The town centre’s food offer is anchored by the new Lidl store and the extended
J.Sainsbury store, but linkages to the centre from the Sainsbury store are poor. The other
main weaknesses identified by the research include the following:
•
It has fallen 300 places in the national rankings since 1999, to 1120th.
•
There is a limited provision of non-food outlets, particularly in the fashion and
household good sectors.
•
There is a relative under-provision of branded cafés and restaurants.
•
It has a more limited mix of specialist and recreational shopping.
•
Retail units are generally small and do not meet the requirements of modern multiple
retailers.
•
There is limited market demand for representation in the centre.
•
There is pressure for out-of-centre development and construction has recently
commenced on a Focus DIY store and garden centre.
•
There is a shortage of leisure facilities in the town. For example, there is no cinema.
•
The gateways to the town centre are poor and respondents to the centre survey also
identified the difficulty of finding parking spaces.
7.54
As with Fakenham, the population is growing within the surrounding area. However, there
is an increasing quality ‘gap’ between the centre’s retail and leisure offer, and the needs of
its growing population. This means that shoppers are increasingly travelling further away
to larger centres that better meet their needs (such as Norwich). This ‘leakage’ of shoppers
and spend is also confirmed by the findings of the street and household surveys.
7.55
The designation of the whole of the town centre as a Conservation Area, along with its
large number of listed buildings, has limited the potential to modernise and increase its
retail offer over recent years. As a result, much of the new development and investment
has occurred on the edge of the town centre - including the J.Sainsbury to the north-east
(off Bacton Road) and the Lidl and Roys Variety Store to the south (off Yarmouth Road).
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7.56
Nevertheless, a development opportunity site has been identified in the town centre, which
has the potential for development over the short to medium term, particularly as the
Council has significant ownership on the site.
7.57
DTZ recommend that any improvements to the centre should initially focus on addressing
the under-representation of fashion and commercial leisure uses. Although market demand
is currently low, we believe that providing the right sized outlets in the right town centre
location will help to generate demand for space in the centre. For example, the need for
more fashion outlets was identified by one-third of respondents to the centre survey.
7.58
An increase in the quality of the eating and drinking establishments and other new
commercial leisure uses (particularly a cinema) would also help to generate more trips to
the town centre and enhance its overall vitality and viability. This is confirmed by the
results of the centre survey, which showed that 16% of respondents wanted a cinema.
(iii) Holt
7.59
Holt is one of the most attractive and popular centres in the District. The Georgian
architecture and choice of quality specialist independent stores draw shoppers and visitors
from beyond North Norfolk. This is illustrated by the findings of the street survey, which
shows that over two-thirds of respondents came from beyond a twenty minute drive time
area. There is also a strong and affluent second home market in the immediate area, and
the presence of Gresham’s public school in the town adds to its overall attraction.
7.60
Holt primarily functions as a niche centre, serving a strong tourist market and providing a
complementary offer to the other North Norfolk centres. It has a larger number and mix of
specialist shops, selling a wide range of goods including antiques, crafts, gifts, boutique
and homeware items. Significantly, over 30% of respondents to the street survey identified
the centre’s retail offer as its main attraction. The findings of the household survey also
indicate that Holt is achieving the highest market share (8%) for fashion shopping than any
of the District’s other main centres.
7.61
The centre’s convenience offer is more limited. It comprises a Budgens, Spar and range of
smaller convenience and food stores. As a result, a high proportion of its local population
tend to shop at the Morrisons in Cromer for their main ‘bulk’ food purchases. There may,
therefore, be a market opportunity for a medium-sized foodstore in Holt (such as a Tesco
Express or Metro).
7.62
Unlike most of the District’s coastal towns, Holt attracts more year-round visits and is
therefore less vulnerable to seasonal fluctuations in holiday patterns. It is therefore vitally
important that Holt’s environment, character and choice of stores is maintained and
enhanced in order to strengthen its future attraction and popularity. There is limited
physical capacity to extend the shopping area as the town centre is in a Conservation Area
and many of its commercial facilities are in listed buildings. DTZ therefore advise that
retail development should be restricted in Holt in order to protect its environment and
character. However, this could lead to increased pressures for out-of-centre retailing.
7.63
The town has a good mix of leisure facilities, although facilities for children and teenagers
are more limited. Significantly some 60% of respondents to the street survey visited (or
intended to visit) one of its cafés and/or restaurants as part of their overall trip to the
centre. In this context, DTZ recommend quality additions to its current café and restaurant
offer to help strengthen the centre’s evening economy.
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7.64
As with other centres in the District, parking, access and traffic are perceived as the
centre’s main weaknesses. For example, poor parking provision and the difficulties
encountered in finding a parking space were identified by over two-thirds of respondents to
the street survey, and one-quarter indicated the need for additional parking. The town is
very much a “victim of its own success”, in that it attracts a significant proportion of
tourists and visitors, and the majority of these travel to the centre by car. DTZ therefore
recommend that careful planning is needed to find ways of accommodating more parking
either within the centre, without damaging the attractive environment, or outside the centre
in the form of a ‘park-and-ride’.
(iv) Cromer
7.65
Cromer is the District’s principal coastal town and one of its largest centres. It functions as
an important shopping and service destination for its local residents, as well as a major
tourist and visitor centre, attracting c.46% of respondents to the centre survey from beyond
a twenty minute drive time area.
7.66
It is placed highest of the District centres in the national ranking (773rd) and has only
experienced a modest decline in its status since 1999. The ‘heart’ of the town is St Peter
and St Paul’s Church, around which the main retail offer is focussed. The market is also a
popular attraction, although it is widely accepted that it should be in a more central
location.
7.67
Cromer’s resident population is growing and the town therefore needs to carefully manage
the potential growth of its retail, service and leisure offer. Maintaining and strengthening
its important day-to-day offer, alongside its seasonal tourist and visitor attractions is
fundamental to the centre’s overall vitality and viability.
7.68
The centre’s retail offer is predominantly targeted at the middle to value end of the market.
Unlike most of North Norfolk’s centres, the town also has a number of larger out-of-centre
stores, namely the Morrisons (formerly Safeway) at Holt Road and the North Norfolk
Retail Park, which is anchored by Argos. These stores mainly serve car-borne shoppers
and there is no research evidence to suggest that they generate strong linked trips to
support the town centre’s retail offer.
7.69
The centre has benefited from some investment and improvements to its street and
shopping environment. This was confirmed by the street survey, in which almost half of
all respondents (47%) indicated that that the centre had improved over recent years.
7.70
DTZ strongly recommend that the Council resist the growth of out-of-centre facilities and
explore new investment and development opportunities in town centre and/or edge-ofcentre sites in the first instance, so long as it does not damage its overall character.
However, as with North Walsham and other centres in North Norfolk, the town centre is
almost wholly within a Conservation Area and contains a number of attractive (and Listed)
historic buildings. Furthermore, the potential opportunity site identified by the Council
and appraised by DTZ in Section 7 will, in our opinion, be difficult to deliver over the
medium term due to complex issues of land assembly and the fact that the Council has no
ownership on the site.
7.71
Thus although there is a need to improve the size and quality of the centre’s retail offer
through the provision of larger units, there are significant physical and planning constraints
to new development in the town centre. In this context, DTZ recommend stronger
strategic management of the town centre to help identify opportunities to develop new
units, or create larger units from existing smaller shops through amalgamation.
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7.72
The town should also aim to maximise its attraction and status as the largest and one of the
most popular tourist destinations in the District. It already benefits from a number of key
attractions, including the cinema and Pier (which comprises the Pavilion Theatre),
although there is a ‘gap’ in provision for the younger age groups. There is also an
identified need for a new swimming pool/leisure complex. Despite its draw of visitors and
tourists, the centre also lacks a quality restaurant offer to help promote a more diverse
daytime and evening economy.
7.73
A key weakness identified by the research is the large volume of traffic that passes through
the town centre and the poor provision of parking spaces – identified respectively by 28%
and 11% of respondents to the centre survey. A strategy is therefore needed to help
manage the traffic flows and to create a more attractive and pedestrian-friendly town centre
environment.
7.74
To conclude, DTZ recommend that the quality of Cromer’s retail and tourist offer be
updated, to create less reliance on seasonality and good weather. Like many UK coastal
resorts, Cromer is in direct competition with many localities in Europe, which are
perceived to be more glamorous and better equipped to serve holidaymakers. Cromer
should not look to compete directly with these centres, but enhance its historic profile and
create modern facilities to keep holidaymakers entertained.
(v) Sheringham
7.75
Sheringham is a popular, if more downmarket, coastal resort town. Its retail and leisure
offer caters for the day-to-day convenience and service needs of its local residents, as well
as the more specialist/recreational needs of its strong tourist and visitor population. For
example, the centre survey confirms that it draws c.58% of respondents from beyond a
twenty minute drive time area.
7.76
It has a good mix of shops and businesses, and low vacancy levels. The town’s retail mix
is well suited to its tourism-led customer profile. However it has fallen 450 places in the
national rankings since 1999, to 1,348th. The town centre also links well to the
surrounding leisure attractions, such as the beach, theatre and North Norfolk Railway.
However further development and improvement is needed to carefully balance the
demands of the local population and tourists.
7.77
The healthcheck identified a relatively good provision of smaller convenience goods
outlets in the centre (14% compared to the national average of 7%), but there is a ‘gap’ in
its foodstore offer. This is confirmed by the market research, which shows that centre
currently only draws c.1% of respondents living in the local area for their main ‘bulk’ food
purchases and there is a significant ‘leakage’ of shoppers and spend to larger stores in
neighbouring centres, particularly Cromer. Significantly, 17% of respondents to the centre
survey also identified the need for a new supermarket in the town centre.
7.78
There is currently a planning permission for a new Budgens store (750 sq.m net) at the
Station Car Park, although the Council can influence development as they have
landownership interest in the site. If developed, this new store will replace the existing
Budgens on Church Street. There is also a planning application for a new 2,750 sq.m gross
Tesco store (comprising 1,200 sq.m net food and 300 sq.m net non-food) on land at
Cromer Road. However, DTZ’s forecasts show that there will only be sufficient residual
spend at 2016 for the new Tesco store, based on the higher spend (Scenario 2) and higher
population growth (Scenario 3) forecasts.
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7.79
It is DTZ’s view that there is a qualitative need for a supermarket in Sheringham to help
‘claw back’ a proportion of the shoppers and spend currently ‘leaking’ outside its local
catchment, and to anchor its convenience and retail offer. In accordance with PPS6, DTZ
advise that the optimum location for this new foodstore should be in the town centre and
have strong pedestrian linkages to the prime shopping area (see PPS6: Annex A, Table 2).
It will also need to be demonstrated that a new foodstore will strengthen the vitality and
viability of the town centre’s overall retail and convenience goods offer. This will help
increase the range and choice of food shopping to the local population, in the most
sustainable and inclusive manner.
7.80
DTZ also consider that there are significant opportunities to develop the leisure/tourism
attractions and economy around the seafront. One opportunity could be to improve the
quality of the centre’s food and drink offer. Although Sheringham has several pubs, cafés
and take-away outlets, it has an under-provision of quality restaurants. Such quality
additions to the eating and drinking offer will help to enhance the evening economy, to the
benefit of both the local population and holidaymakers.
7.81
The town is well served in terms of other leisure provision and DTZ believe that only
limited new development is needed. However one sector where growth should be
controlled and managed is that of amusement arcades, as the town has an over-provision.
Further development of such outlets could detract from the attempts to improve the quality
of the rest of the town.
(vi) Hoveton
7.82
Hoveton is an important gateway centre to The Broads and is identified as a ‘unique’
centre in the Local Plan. Its retail offer is dominated by the independent retailer Roys,
which operates from several large shop units in the centre. The centre has evolved to meet
the needs of both its local catchment population and holidaymakers. This is illustrated by
the fact that c.47% of respondents to the centre survey live beyond a twenty minute drive
time area.
7.83
DTZ do not believe that there needs to be any significant increase in Hoveton’s retail or
service business offer. Those who shop in, and visit the centre, perceive its offer as being
high quality.
7.84
There may be an opportunity to improve the quality of the café and restaurant provision to
benefit holidaymakers, as well as the local population. This would also benefit the centre’s
overall vitality and viability, by encouraging longer dwell times and improving the evening
economy.
(vii) Stalham
7.85
Stalham is one of the District’s smaller centres and it functions primarily as a convenience
and service destination for its local catchment population. The survey evidence confirms
that only 18% of respondents to the centre survey live beyond the twenty minute drive time
area.
7.86
Although the new Tesco store has achieved a strong market share of trips and spend from
within its local catchment area, it has been unpopular with certain sections of the local
community and businesses. Nevertheless, DTZ understand that although the number and
quality of shops on the High Street has been declining, this had been occurring before the
new Tesco store opened.
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There is a need to reinforce the role and attraction of the High Street as the main shopping
area, and reinforce the linkages with the Tesco store. The market research has confirmed
that a significant proportion of the centre’s local catchment travel to larger neighbouring
towns for their comparison goods shopping and entertainment needs. As a result, DTZ
understand that Stalham’s High Street businesses are struggling to maintain market share.
Significantly, over one-third of respondents to the centre survey identified the need for a
better range and choice of stores, as well as more clothing and fashion outlets.
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Stalham’s market is popular and attracts visitors to the centre and will need to be
maintained and enhanced. This is supported by PPS6 which encourages local planning
authorities to retain and enhance existing markets and, where appropriate, re-introduce or
create new ones, as an integral part of the vision for their town centres (para. 2.27).
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There has been an increase in the number of take-away outlets over recent years, but the
centre has a limited provision of pubs and cafés. Increasing the provision in both the food
and drink sector could help to broaden the town’s attractions during the day and evenings.
These improvements would benefit the local population, especially the younger residents,
who are not currently well catered for.
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The town should also aim to market and promote its attractive environment and close
proximity to the Norfolk Broads. Key attractions, such as its two small museums and
market, combined with the new Tesco store (many holidaymakers on the Broads will be
self-catering) make the town an attractive destination for visitors and tourists.
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Finally, the derelict old station site represents a poor gateway to the town. There is a need
to improve links between the High Street and the Staithe. There is also a need to improve
public transport into the centre from surrounding settlements.
(viii) Wells-next-the-sea
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The town is one of the smaller centres within the District, but is an important visitor and
tourist destination. It performs a ‘twin’ role – catering for the day-to-day convenience and
service-based needs of its local population, as well as providing a mix of specialist tourist
and leisure uses. Its wider role is confirmed by the market research, which shows that it
draws the highest proportion of respondents from beyond a twenty minute drive time
(c.75%).
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The shopping area extends in a linear route northwards from Station Road, along an
attractive High Street, to the harbour front along Staithe Street. The units to the north and
along The Quay are predominantly orientated at the tourist and visitor market, comprising
a range of gift and antique shops, along with amusement arcades, take-away outlets and
restaurants. Significantly, almost one-quarter of respondents to the centre survey
specifically commented on the centre’s attractive environment and the attraction of The
Quay.
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The centre survey confirmed that over half the people interviewed in Wells were either
tourists or day-visitors, which was significantly higher than for Sheringham (31%),
Hoveton (28%), Holt (23%) and Cromer (21%). This is also reflected by the fact that
some 70% of respondents to the street survey had stopped (or intended to stop) for
something to eat and/or drink as part of their trip. This was higher than for any other of the
District’s centres.
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DTZ agree with the Council’s broad Settlement Strategy, which identifies the need for the
town to focus and build upon its status as a tourist destination. Wells needs to develop
itself as a seaside attraction, but one that offers a different and complementary offer to
Cromer and Sheringham to the east. For example, Wells could create ‘unique’ attractions
based around the flats next to the town, which we understand are a haven for wildlife. The
attractive harbour area also represents a significant opportunity to create year-round visitor
attractions and promote quality restaurants, cafés and holiday accommodation.
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The market research also highlighted that local residents travel to larger towns for their
retail needs and entertainment. DTZ consider that the town would benefit from
improvements to the quality of its retail and service offer to meet the growing demands of
the local community, and also that of people living in the rural areas surrounding the town.
However, a Conservation Area covers the town centre and there are a significant number
of Listed Buildings in the prime shopping area, meaning that there are significant
constraints to new development.
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As with most of the other North Norfolk centres, parking is also perceived as one of the
centre’s main problems. Almost one-quarter of respondents in Wells indicated that there is
a lack of available parking within the town and that it is too expensive. However, these
results also reflect the fact that the surveys were conducted during the holiday period when
parking demand is at its height.
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Nevertheless, it is DTZ’s recommendation that parking and traffic issues should be
addressed in all the District’s centres to encourage more people to visit and spend longer in
the centres, albeit that the pressure on parking is very much determined by the tourist /
visitor role of centres.
Overview
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Recent research4 indicates that over the next 20-30 years spending power will be
concentrated in age groups of consumers who value quality and style, over cheapness and
fashion; who want something unique; and who have the leisure time to seek it out. The
projected increase in housing demand, fuelled by smaller households, people living longer,
delayed families, divorce and people choosing to remain single is likely to be
accommodated primarily in or close to town centres, further strengthening their retail
catchments. This is good news for those smaller centres that are in a position to offer an
alternative to noisy, family-orientated shopping malls. Namely a differentiated retail offer
combining multiple and independent shops, leisure/tourist attractions and a place with a
sense of identity and character.
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Based on our research, DTZ recommend that any major new retail and commercial
development should be concentrated in the District’s principal centres – namely
Fakenham, North Walsham and Cromer. They are the natural foci for locals and visitors to
purchase convenience and mainstream comparison goods before visiting other parts of the
District. They are also the only centres that have the necessary scale and character of
existing facilities and catchment populations to support the forecast capacity for new
comparison goods retailing across the District.
4
BCSC (2004) ‘The Smaller Town Report – Delivering the retail-led renaissance in smaller towns and cities’.
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The attraction of multiple/branded retailers and businesses in these principal centres will
help to create vitality and a stronger ‘year round’ economy. A stronger retail, service and
leisure offer will also help to make the centres more attractive out of season. This would
help some of the District’s centres to break out of its current “peak-trough” annual holiday
cycle. New development in these centres will also need to comprise larger and more
flexible shop units to accommodate the needs of modern retailers for more space.
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DTZ’s high level planning and market appraisal of the sites identified by the Council in
three main towns has indicated that the Fakenham and North Walsham sites appear, at this
stage, to be more viable development opportunities (see Volume 4). This is obviously
dependent on more detailed market, transport, urban design, land ownership and financial
appraisals. It is DTZ’s initial market view that the Cromer opportunity site will be more
difficult to deliver over the medium to long term, as the Council has no ownership on the
site and it will involve detailed and potentially protracted discussions with a mix of
landowners. DTZ advise the Council that they may need to consider using their CPO
powers to assemble all the town centre opportunity sites.
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Finally, DTZ recommend that the District’s smaller centres maintain and enhance their
niche and specialist offer. DTZ see little point in trying replicate Norwich’s mass market
multiple offer, as the District’s centres do not have the physical capacity, catchment
populations, nor the infrastructure to achieve the necessary critical mass to be competitive.
These centres should build on their niche role and function, and look to satisfy the
demands and the needs of their local residents, whilst also marketing their offer to a wider
audience.
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