Out-of-town threat to High Street

A BOOM in new shopping centres from 2007 will see more than three times the amount of retail space opening than in recent years - leading some to predict disaster for the High Street.

News of the huge increase in retail selling space is in stark contrast to the struggles of retailers, some of which say they have not experienced such poor trading since 1992, when the economy was mired in recession.

According to a report by retail analyst Verdict, six huge new edge-of-town shopping centres, similar in size and situation to the likes of Bluewater, Kent, or Lakeside, Essex, are due to open between 2007 and 2010. They will be in Liverpool, Bristol, Leeds and Birmingham, with two more in London.

These will fuel an expansion that will add an extra six to ten million square feet of space a year. Over the past five years, new developments have averaged less than two million square feet annually.

While Verdict predicts that 2007 and 2008 will be strong years for the economy and consumer spending will have recovered, retail groups warn that the boom in new space could spell disaster for the High Street.

Kevin Hawkins, directorgeneral of the British Retail Consortium, said: 'The landlords bringing on this new space won't suffer because it will be the most desirable space - big, accessible and with scale economies.

'What it will mean is an even stronger gravitational pull away from High Streets and town centres, which are already in decline.'

Verdict says it is a particularly challenging environment for store groups. Typical High Street rents have risen by 4.6 per cent in the past year, but sales have grown by only 2.2 per cent as shops have made unprecedented price reductions.

Prices are expected to decline by a further 1.4 per cent in 2005, the fourth successive year they have fallen.

Meanwhile, further pressure is mounting from online retailers and discounters. In the short-term, only 2.4 million sq ft of space is due to open this year and 1.6 million sq ft in 2006 - before the shopping centre boom gets under way.

Verdict forecasts that discounters should flourish while mainstream retailers struggle.