Retail construction recovery is
gaining momentum after a prolonged downturn.
New construction work for all types
of retail spaces is showing encouraging signs of improvement.
Total retail construction starts, main contract awards, and detailed
planning approvals were all higher in the second quarter compared to the period
last year. Total new retail work starting on site was worth £480 million in the
three months to June, up 21% on last year.
Moreover, the upturn is extending beyond new construction for the
supermarkets to the wider retail sector as shopping centres and general
retailers respond to fierce competition from online suppliers.
Certainly, the supermarkets are continuing to invest heavily in updating
their premises and opening new sites. Supermarket project starts rose by 65% in
the three months to June compared to last year and accounted for slightly over
half of all retail starts.
Glenigan
data provides details on the widespread opportunities for work in the retail
construction sector, including for budget chains such as Lidl and Aldi which
are continuing to expand.
For example, detailed plans have recently been granted for a £3.1 million
Aldi supermarket & drive-thru café in Derby involving a floor area of
nearly 1,800 sq m and where work is due to start this autumn (Project ID:
23086383).
Investing to attract shoppers
Other major retail brands are also investing more in their premises to
attract shoppers. John Lewis Partnership plans to invest £542 million on
refreshing its shops and updating its technology in the current financial year,
up 70% on last year.
One scheme for which the group has recently submitted detailed plans is a
£3.27 million Waitrose store extension in west Ealing (pictured) where work is
set to start in early 2025 (Project ID: 23284379).
But Glenigan data also shows that new work is on the rise more widely across
the retail sector. Project starts on shops were worth £183 million in the three
months to June, up 37% on the period last year.
Building activity in the sector is picking up across the country. Glenigan
data shows that retail construction project starts in the second quarter
doubled in Scotland compared to last year to £68 million and rose three-fold in
the North East to £57 million. They also grew more than four-fold in both the
West Midlands to £54 million, and in Yorkshire & the Humber, to £44
million.
Glenigan data also points to numerous smaller and medium-sized projects in
the pipeline across the country. In Swindon, detailed plans have been granted
and work is set to start early in the new year on a £3.12 million non-food
retail store in the town’s Oxford Road involving almost 2,500 sq m of space
(Project ID: 22328445).
Meanwhile, in Newcastle, detailed plans have been granted and work is set to
start in the autumn on a £2.8 million retail extension for client Libra
Textiles at the city’s Park Lane. Work on the project is set to run for six
months (Project ID: 24078588).
Work pipeline growing in London
The work pipeline for retail construction work is growing strongly in London
– which accounts for almost one-third of approvals in the sector. Retail
approvals in the capital were worth £197 million in the three months to June,
almost three and a half times (243%) the value in the period last year.
A major scheme in London where detailed plans have been submitted and work
is set to start in the new year is King Sloane Properties’ £90 million East
Oxford Street Development. This involves new retail and workspace with a floor
area of over 11,000 sq m, including a new six-storey building (Project ID:
21538351).
A niche retail area that is providing good opportunities for smaller
contractors is petrol filling stations, as operators invest to enhance their
convenience store offering. Project starts on petrol stations were worth £24
million in the three months to June, nearly four times the level of a year ago
and equal to 5% of all retail starts.
One scheme in the sector where detailed plans have been granted and work is
set to start this autumn is a £620,000 project at Bishopston Road West in
Stockton-on-Tees. The scheme involves the demolition of an existing petrol
filling station and construction of a forecourt building with a retail shop
with new pump islands and canopy (Project ID: 21281182).
