Town Centre Strategy Update

Appendix i

Town Centre Strategy

Update

November 2009

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Town Centre Strategy Update

1.1  The Town Centre Strategy and Action Plan was presented to Members at Executive Board in October 2008 as a response to the effect that Eagles Meadow may have had upon the town centre of Wrexham and to capitalise upon the positive benefits of the new development for the continued regeneration of the town centre.

1.2  However, prior to the opening of Eagles Meadow, there had already been some concerns over the performance of businesses in the UK and well-documented difficulties in the banking industry. In February 2008, for example, Northern Rock was taken into state ownership and the banks were no longer lending money to each other.

1.3  A number of well-known high street names had been taken into administration throughout 2007 and 2008, although none had been of a high enough profile to suggest that there would be a recession. Kwiksave and Adamskids, for example, both went into administration and were subsequently rescued. Music Zone and Fopp both disappeared quietly from the high street and Choices Video became an e-tail only business. Over the next six months it is likely that more businesses will enter administration and it is important that this situation is monitored at a national level in order to inform the local position.

Table 1 Casualties and Rescue Packages 2008/09

1.4  The biggest shock to the retail industry was at the end of 2008 when the credit insurance company Coface withdrew its insurance from Woolworths. This meant that the suppliers of Christmas stock requested cash payments for goods on delivery and by the beginning of November 2008 the company was looking for a buyer for its high street business. Woolworths had cash-flow problems because it had been acquiring business to business companies that were profit making but the withdrawal of credit insurance forced the company into administration and on 27 November 2008 Deloitte’s were appointed. The last stores remaining open closed their doors on 5 January 2009, changing the face of the high street across the UK.

1.5  Some high streets have been struggling for years, lacking the investment to offer customers a reasonable choice and failing to compete with experiences in other towns and retail parks in close proximity. The recession has exacerbated these problems and also spread them more widely, especially as customer confidence is low.

1.6  It is against this background that Eagles Meadow opened in Wrexham and has been trading for its first year. At the same time that some voids (vacant premises) were expected because of relocations to larger and better premises in the town, there have been a significant number of voids due to businesses going into administration.

1.7  This update to the Strategy will examine the changes that have taken place over the past year and provide a more accurate idea of how Wrexham is faring one year on from the initial Town Centre Strategy and Action Plan.

Wrexham – the past year

2.1  Since October 2008, the following new retailers have come to Wrexham.

Table 2

* Coloured Earth is an independent.

** Pure Image was on a short lease at Christmas last year and is on a month notice on either side on a holding-over arrangement that means that each party can give one month’s notice to quit.

2.2  Since October 2008, the following retailers have left Wrexham.

Table 3

Table 3 shows that the vast majority of retailers that have closed premises in Wrexham are Nationals, most of which have gone into administration and hence many towns and cities have experienced the same closures.

2.3  Since October 2008, the businesses in the table below have relocated within Wrexham. They have all taken larger floor space than they occupied previously. Any business relocating is also investing in its new premises with new fit-out and this should be seen as being beneficial to the property stock in the town centre.

Table 4

2.4  Voids

The situation is one that is constantly changing and that is affected by three factors : growth; administrations; and relocations.

Table 5 Vacant Units

Source : Goad

2.5  Expected vacancies

Christmas trading and the period from post-Christmas to the first quarter rent demands at the end of March 2010 will be crucial for Wrexham this year. The British Retail Consortium (BRC) states that for most retail businesses, 60% of their turnover is taken during the six weeks before Christmas. Tracking the third quarter figures and Christmas trade will help inform the national and local picture over the coming months, particularly in the context of last year’s Christmas trade when Blacks, for example, were issuing profit warnings that have ultimately led to them closing stores this month, leaving Millets in jeopardy.

Reports up to February 2009 suggest that menswear (Moss Bros Group, Ted Baker), some card retailers (Birthdays, Celebrations), books (sales hit by Amazon and Tesco discounts) and toy retailers (sales hit by aggressive sales at Woolworths prior to closure) were the areas where Christmas sales were hit hardest.

Many of our high street stores are collectives with groups made up of different brands. The Arcadia Group, for example, consists of seven different high street names. Some stores within groups under-perform but are still an essential element of the overall brand and are retained for their high street name whilst some businesses consist of divisions that include franchises as well as managed shops.

2.6  Rental values

The recession may affect rental values within the town centre but as yet there is little information about this. Most rents for businesses are set at five yearly set periods from the commencement of a lease and it could be another four years before businesses are able to re-negotiate their rents with the landlords.

The new rateable valuations for the next five year period are set to commence on 1 April 2010 and will be based upon the rental values of properties within areas set as at 1 April 2008. This will mean a rise in rateable valuations in 2010 that is quite substantial and could affect the viability of some businesses.

2.7  Retail ranking

A number of retail analysts rank towns and cities using different criteria. At the time that Eagles Meadow was being developed, Wilson Bowden predicted that Wrexham would rise from 173 to 78 in the UK list of retail centres using the Javelin Venuescore rankings. The recession has altered the outcome of this prediction and Wrexham has risen to 116. However, this needs to be viewed in context as Table 6 shows.

Table 6 CACI rankings

A comparison with Chester and Shrewsbury using the CACI figures which are based upon comparison goods spend shows that Chester remained static from 2007 – 2008 whilst Shrewsbury dropped down the rankings and that only Wrexham improved its position.

3.0 Forecast for 2010

A recent report by Colliers CRE (Great Britain Retail; Research, Colliers CRE, Autumn 2009, p 8) suggests that recovery from the recession will be protracted, meaning that 2010 will be another difficult year for the retail industry. Customer service, innovation and perceived value for money will be the key to success for retailers.

On a positive note for Wrexham, the report refers to the lack of new retail floorspace set to come to the market as developers have put schemes on hold. This means that high streets should begin to see competition for prime locations once recovery does get underway.

Christmas trading is likely to be compacted into a short period with some consumers not purchasing until the last minute or waiting for offers to be available. This will, in turn, affect the profit margins of retailers and there may be further casualties in the New Year.

It is important, therefore, that we look at measures that the Economic Development Department can take to support the businesses in the town centre whilst also continuing to promote the town centre to new businesses. These are shown in the attached Action Plan matrix.

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