Capital & Regional, Lawrence Hutchings, Chief Executive
Q. With the COVID-19 crisis abating, how do shoppers now view town centres?
If someone had told me in late 2019 that shops would be shut due to a pandemic for months at a time, I just wouldn’t have believed them. And there is no doubt that retailers and town centres have had a very torrid time.
But we are now deriving from confidence and optimism because we have seen what happens when you take the ability for people to shop away: people don’t like it at all.
We are also encouraged that having reached UK retail penetration of 35%-plus, e-commerce now accounts for 26% of UK retail sales. Of course, this is significant, but it shows that there is ceiling above which e-commerce sales outside of a lockdown are unlikely to rise.
There is far more clarity now and the importance of a physical presence has been reinforced by lockdowns. Major retailers are now saying they will maintain stores whatever happens because the cost of doing business online only is very high.
Pure play online retailers in fields like grocery and pharmacy have found making a profit very challenging, whereas these shops perform well because people often need to visit them, and don’t want to have to wait three days for a delivery.
At the same time, for many retailers, the bulk of their returns and collections are made to stores, so the relationship with online sales is completely symbiotic.
Q. What role will shopping play in the town centre of the future?
Shopping centres play a huge part in their communities: they are at the heart of communities and they enrich communities.
This is social infrastructure where people meet, and again this has been reinforced by COVID. People who were locked down or living alone were desperate to get out to our centres to be among people and interacting with people. We will never doubt that again.
We have also understood how shopper’s needs are changing. Fashion retail in our centres has fallen from 30% to 20% which doesn’t worry us because retail has been evolving for 1,000 years.
Athleisure is still very appealing to customers, but whereas people used to shop in-store more for clothes, their health, diet and fitness is more important to them now.
Q. How have you adapted to these changing needs?
Capital & Regional is proud to have signed an agreement with Whittington Health NHS Trust for the first of 40 new community diagnostics centres nationally, at The Mall, Wood Green in London’s Haringey.
This is part of our community shopping centre strategy, which aims to provide local people with convenient, needs-based access to tailored goods and essential services.
The centre will provide x-ray, ultrasound, ophthalmology and phlebotomy services to local people across two ground floor units, which will create a 5,500 square foot space and also drive footfall through The Mall.
The NHS’s strategy is to bring healthcare to the people and shopping centres and even high streets are a great way to do that.
Q. What other repurposing initiatives is Capital & Regional undertaking?
We have also signed an agreement with Reef Technology which will see under-utilised spaces in two of our shopping centres car parks transformed into hubs for locally curated goods, services and experiences.
For example, our car parks can be used for neighbourhood kitchens, allowing for cooking and delivery supporting local and international restaurants.
Urban farms are another option, using hydroponic agricultural technology which satisfies demand from businesses and consumers for locally grown, environmentally friendly food.
Last mile logistics are another fast-growing use for Capital & Regional car parks, with Reef’s couriers and trademark e-scooter cargo fleet delivering packages quickly and cleanly to homes and businesses.
And smart transit and ecofriendly commuting are other arenas we are capitalising on, incorporating e-bikes, e-scooter stations and digitalised car park management.
We now have real momentum and expect to see a steady climb out of lockdown, particularly because our centres are perfectly placed in the heart of communities.
While we understand the role our shopping centres continue to play as physical destinations, we are also acutely aware of their potential in the growing digitalisation of local economies, which has accelerated so much in the last two years.
Town and city centres have an exciting role to play in levelling up Britain, and the outlook is more positive for many years.
Other Repurposing Real Estate Interviews
Repurposing Real Estate - The future of the world's towns and cities
Name: Lawrence Hutchings
Title: Chief Executive
Company: Capital & Regional
