UK GROCERY REAL ESTATE REVIEW - Colliers Retail Capital ...€¦ · otherwise occupied, the fight...

J A N U A R Y 2 0 1 9

UK GROCERY REAL ESTATE REVIEW

O U T L O O K

D O I N G B AT T L E W I T H T H E A M A Z O N I A N S

The UK supermarket sector is at a pivotal

point in its evolution. Whilst a merger

between Sainsbury’s and ASDA would

reshape the sector, we believe that the

much-vaunted arrival of Amazon

potentially constitutes a far more seismic

event for the grocery business.

If the ‘SASDA’ merger goes through, the ‘Big

Four’ may temporarily become a trio but the

possibility of Amazon eventually making it

a quartet again should not be discounted.

The Competition and Markets Authority

(CMA) is yet to decide if it can green light

the ‘SASDA’ hook-up but if it does

eventually block it then all domestic

operators may be severely disadvantaged in

terms of doing battle with the Amazonians.

The Big Four UK operators are all striving

for cost and logistical efficiency in order

to keep delivering competitive prices to

customers and maintaining profit

margins. This is the primary driver for the

‘SASDA’ merger and was a major factor in

Tesco’s acquisition of Booker.

Meeting the pricing challenge was

already hard enough for them in face of

the price pressure being exerted by the

discount offers of Aldi and Lidl but

Amazon – with all its logistical power –

could end up being the ultimate foe.

Whilst our politicians are currently

otherwise occupied, the fight for the UK

supermarket sector could end up being a

highly charged affair with the cost of

food, potential job losses and Amazon’s

tax status to the fore.

How this will impact the property

investment market that is generated by

UK supermarket property remains to be

seen. Property investors are very much

attracted to supermarket assets because

of the consistent long-term returns that

the assets can deliver, and the relative

stability and resilience of the operators’

covenants. Of course, if there is upheaval

in the operator landscape, then this

status quo will change. Accordingly, we

believe there has never been a more

important time to take a forensic

approach to the sector, and for this

reason we have developed our

Supermarket Vitality Index which

underpins our market knowledge.

If Amazon created a supermarket

business that was based on online

shopping this could prejudice the future

perceived value of physical stores.

However, this seems an unlikely scenario.

It’s already been leaked that Amazon is

looking for a first tranche of 200 stores –

and this shift to a physical retailing

environment is perhaps not surprising

when it’s clear that even the established

operators cannot make money out of

online orders.

So it looks like it could be a ‘straight

fight’ between Amazon and the domestic

operators in terms of the preferred

trading environment. A resurgent Tesco

plus the newly minted ‘SASDA’ force who

make for an interesting line-up of

competitors, but if the CMA blocks the

merger then Amazon may have the chink

in the armour that they’re looking for. And

even if the merger proceeds then the

stores which the CMA compels ‘SASDA’ to

relinquish could become the basis of

Amazon’s UK supermarket network.

total transaction volume

17% drop on 2017

average net initial yield

Aldi market share

2014 - 2018

Tesco market share

2014 - 2018

Lidl market share

2014 - 2018

Asda market share

2014 - 2018

+2.50% -1.30% +1.70% -1.50%

£1.06 billion

44Deals

5.02% NIY

U K G R O C E R Y | R E A L E S TAT E U K G R O C E R Y | R E A L E S TAT E

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M A R K E T S H A R E D E C E M B E R 2 0 1 8

S H O P P E R S D R I V E M A R G I N S

So much has changed in grocery retail

over the last decade of disruption, and

yet so much has remained the same.

Back in December 2008, the combined

market share of Tesco, Asda, Sainsbury’s

and Morrisons commanded more than

three quarters of take-home grocery

sales. The relatively obscure Aldi, Lidl,

and the now departed Netto, between

them captured only £1 in £20 through

their tills. A few early adopters had their

hands on a smartphone (the iPhone was

just over one-year old), while the

overwhelming majority still accessed the

internet through computers.

In the last ten years, it has been the

relentless switching of shoppers’ FMCG

spending from ‘big box’ retail, in two

directions, that has shaped most of the

changes in the supermarket sector:

1. Discounters in all their forms

2. E-commerce

By Christmas 2018, Aldi and Lidl’s

combined market share stood at 12.8 per

cent, with two thirds of households

visiting at some point over the festive

quarter. 7.1 per cent of groceries were

bought online, which while still a growing

channel, is perhaps a surprisingly modest

amount in this digital age.

T H E C H A N G I N G C O N S U M E R

Aldi +2.50%

Co-op -0.20%

Lidl +1.70%

Sainsbury’s -0.30%

Tesco -1.30%

Morrisons -0.60%

Asda -1.50%

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T E S C O H O L D S T H E L I O N ’ S S H A R E O F T H E M A R K E T, F O L LO W E D B Y S A I N S B U R Y ’ S A N D A S D A


0 0 40 0 3

2018 was, on the whole, a better year

for the supermarket sector. The World

Cup inspired some, and the long

heatwave was enjoyed by all. Impulse

purchasing of soft drinks, alcohol and

ice cream meant a bumper summer of

sales, particularly in convenience

formats close to homes. By Christmas

the whole market had slowed

somewhat to a growth rate of +1.6 per

cent, but in the context of the trouble

in non-food on the high street, this

looked like a quiet success.

S LO W I N G O N L I N E S A L E S

Groceries are to some degree

insulated from the worst challenges

from online competitors. There is

something inherently physical about

the food, drink and toiletries people

buy. Twenty per cent of households

bought at least some of their

groceries online in the last quarter of

2018 - barely changed from the year

before. Where growth did come, it

was from the already converted

shoppers spending more, typically

more affluent families. When

shoppers do choose to buy online,

their decision is highly influenced by

where they do their bricks and mortar

shopping, meaning overall the

mainstream supermarkets retain

their market share, albeit with

challenges to retain margin.

What hasn’t changed in the last ten

years have been the reasons behind

store choice. Fundamentally

shoppers have always gone to the

places that offer them convenience,

range and good prices. What

consumers mean by these three

factors, and how retailers have

evolved to meet these needs have

been anything but static.

C O N V E N I E N C E I S S T I L L K I N G

Convenience doesn’t just mean

convenience stores. For all the

efforts put into creating loyalty,

through advertising, card schemes

and vouchering, the single best

predictor of market share remains

the number of people shopping at a

retailer. What marketeers call

penetration very closely translates

into traditional footfall. A convenient

location remains key in many

instances. But for some shoppers,

online is convenient, and for an

increasing number a discounter is

convenient as their store estate

expansion brings a branch closer to

more shoppers.

With so many more retailers close by,

it is no wonder that the proportion on

spending going through the tills as

top up baskets (rather than trolleys)

has risen to nearly two thirds. This

doesn’t mean trolley shopping as a

habit will disappear. Most households

still do a big shop at least once a

fortnight, and more frequently if they

are families.

F O C U S O N S T O C K

Getting the right range on the shelves

is a hugely complex task for retailers.

A shopper wants a wide enough

variety of products to give genuine

choice, but not to be overwhelmed by

redundant options. At the same time,

they want simplicity in finding their

favourites, but still have the option to

try something new. In recent years, all

supermarkets have tilted the balance

of their ranges in the direction of own

label ranges and away from brands.

Own labels now account for half of UK

grocery sales. For retailers the benefits

are twofold. Firstly, the chance to

differentiate from other stores through

offering something unique (making

their own branding a bigger part of the

shopping trip). Secondly, own label

lines in some cases could offer higher

margins to retailers.

No shopper wants to pay over the

odds, and many are feeling financially

squeezed, hence the importance of

price to shoppers and the continued

success of the discounters. The

average UK household spends more

than £4,000 per year on their grocery

bills, and 60 per cent are actively

looking to save money by shopping

more cannily.

The supermarkets that win additional

shoppers will be the ones to prosper in

2019 and beyond. People vote with their

feet and digital clicks for retailers that

are convenient, have a great range, and

offer the best value. This won’t change,

but how the grocers meet these needs

will have to constantly update.

Technology will be part of the story, for

instance the arrival of checkout-less

shopping, or even stores. The market

shares, balance of large, small, dark

and totally online stores will flex, but

fundamentally the shopper reasons for

choosing where to shop won’t change.

F R A S E R M C K E V I T T Kantar Worldpanel

U K G R O C E R Y | R E A L E S TAT E

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20

18

16

14

12

10

8

6

4

2

Tota

l Cap

ital

Val

ue (£

00s)

70

60

50

40

30

20

10

OtherSainsbury’s Morrisons AsdaTesco Waitrose M&S Other No of transactions

Num

ber

of T

rans

acti

ons

2010 2011 2012 2013 2014 2015 2016 2017 2018

Retailers were only responsible for 13 per

cent of all purchases - well down on the

high-water mark of 45 per cent in 2016.

This does not reflect a change in

sentiment from them or their

fundamental desire to bring assets back

under control that they previously had

relinquished through sale & leasebacks.

The misalignment of RPI-linked rents has

been a long-term driver of this activity,

but more recently it has been hampered

by the effect that recent M&A activity has

had on balance sheets and a general lack

of available funds.

A new breed of investor is making an

impact. Atrato’s Supermarket Income REIT

is a real estate investment trust investing

in the grocery sector. In 2018 they acquired

£104 million of assets, and are set to

continue this trend as we enter 2019. We

are aware of others looking to create

dedicated investment vehicles in this

space. Average Net Initial Yields in the

Supermarket sector since 2010 have been

4.91 per cent. At 5.02 per cent, the figure

for 2018 was very much in line with the

market average.

Competition for Aldi / Lidl stores remained

strong, with a lack of investor exposure to

the covenant and smaller lot sizes driving

demand and hardening yields to sub 4%. In

2017, Colliers’ view on yields for prime

assets sharpened to 4.25 per cent, while

secondary assets averaged out at 5.50 per

cent plus. These levels continued to

prevail through 2018 and we expect them

to remain largely unchanged this year.

A C H A N G E O F B E H AV I O U R

2018 was without a doubt a momentous

year for the Retail sector, as landlords

and tenants alike finally woke up to the

full extent of the change in consumer

behaviour. In the wider market, the

volume of Retail Investment

transactions diminished considerably.

However, 2018 will also go down as the year

that the grocery market began to

differentiate itself from the wider Retail

market. The relatively limited impact of

e-commerce on the sector has encouraged

investors to reinvest in the sector,

particularly in light of very few alternative

and attractive retail opportunities.

C O N S I S T E N T P E R F O R M A N C E

Once again, the market has continued to

perform consistently despite wider

market pressures, one of the principle

reasons that this sub-sector of the

investment market continues to thrive.

The total volume of investment

transactions in 2018 was £1.06 billion,

down from £1.4 billion in 2017. This

reflected a general reduction in

transaction volumes, but - with a total of

44 assets changing hands - was largely in

line with the previous five-year average.

UK institutions have returned to the

sector and were responsible for 44 per

cent of all purchases in 2018, up from 34

per cent in 2017. Their quest for yield and

covenant deals, where product is limited

continues unabated.

I N V E S T M E N T M A R K E T R E V I E W

S U P E R M A R K E T T R A N S A C T I O N S 2 0 1 0 - 2 0 1 8

2010 2011 2012 2013 2014 2015 2016 2017 2018

89%75%

89% 87%97%

53%

18%34%

44%

I N S T I T U T I O N A L I N V E S T M E N T A C T I V I T YAcquisitions

T R A N S A C T I O N V O LU M E by Purchaser

Institution Property OverseasRetailer Other

44%

19%

13%

8%

16%

44%

19%

13%

9%

16%

T R A N S A C T I O N V O LU M E by Vendor

Institution Property OverseasRetailer Other

38%

48%

14%


0 0 80 0 7

K E Y 2 0 1 8 S U P E R M A R K E T I N V E S T M E N T T R A N S A C T I O N S

P R O P E R T Y D AT E C O M M E N T

London NW8, Morrisons February 2018

Aberdeen Standard sold an 81,000 sq ft

Morrisons to Invesco for £43 million, 4.57 per

cent NIY.

Quedgley, Tesco Extra March 2018

East Hampshire District Council acquired

the 103,447 sq ft food store from Legal &

General for £29 million, 5.74 per cent NIY

Edinburgh, Sainsbury’s May 2018

Acquired by Investra for £27.50 million, 5.50

per cent NIY. 20-year term with OMV

reviews.

Sheffield, Morrisons June 2018

Sold by Palmer Capital / Opus North to

Supermarket Income REIT for £52 million, 4.6

per cent NIY.

Cirencester, Tesco September 2018Acquired by Tesco from Aviva Investors for

£57 million, 5.15 per cent NIY.

Borehamwood, Morrisons November 2018

Blackrock acquired the asset in an off-

market transaction for £47 million, 3.50 per

cent NIY. Long unexpired term of 27 years,

subject to RPI linked reviews.

Romford, Aldi November 2018

CBREGI sold the 20,732 sq ft asset to OLIM

for £11 million, 3.35 per cent NIY. 25-year

lease with RPI reviews.

H I L L S B O R O U G H , M O R R I S O N S S O L D B Y PA L M E R C A P I TA L / O P U S N O R T H , C O L L I E R S A D V I S E D T H E V E N D O R


0 1 00 0 9


I N V E S T M E N T M A R K E T O U T LO O K

Confidence has returned to the Grocery

sector and trading remains resilient

despite the negative Retail backdrop.

It is realistic to differentiate the

sector’s prospects moving forwards.

However, there are a couple of issues

that are becoming more pressing

as time progresses.

Firstly, rental growth is still a long way

off in all but the most constrained/

affluent locations.

In an era of reduced margins, rental

deflation is inevitable. However, over

time, long leases and RPI-linked rents

are only going to exacerbate this

misalignment with the ‘real market’. Just

how operators and landlords deal with

this issue will be key to the long-term

health of the sector.

Not surprisingly, landlords show no signs

of accepting lower rents, whilst at the

same time the occupiers have no desire

to extend leases - their only real

bargaining chip. This must change.

The issue of over-renting puts larger

stores under increased scrutiny. There is

evidence that the consumer is happy to

accept less product choice and shop at

smaller stores (sub 30,000 sq ft) instead

of making the traditional pilgrimages to

the larger 70,000 sq ft-plus edge of town

stores. As things stand, there is no

immediate threat. However, investors

will need to closely monitor this trend.

T R A D I N G O U T LO O K

• Record Q4 2018 sales for

supermarkets of £29.3 billion

• Big Four market share is down,

as is Waitrose, M&S and Ocado

– significant!

• Aldi, Lidl, Co-op, Iceland all up

although they added several

stores to their portfolios in 2018

• Premium operators look

vulnerable moving forward

• Winners in addition to continued

Aldi and Lidl improvement will

be Co-op who are getting to

grips with their urban offer

• Margins will continue to be put

under pressure

The proportion of

grocery shopping

which is done

online continues

to grow, and was

up 3.9 per cent in

2018

However, it is

failing to attract

new customers.

The growth is

powered by

existing

customers

spending more

Operators appear

more relaxed

about the long-

term impact and

prospects of

charging for

delivery

The operators

exhibiting the

greatest growth

have no online

offer

O N L I N E N O T A L L F I N E

T H E C O N S U M E R S E E M S H A P P Y T O A C C E P T L E S S C H O I C E AT S M A L L E R S T O R E S I N S T E A D O F M A K I N G T H E T R A D I T I O N A L P I LG R I M A G E S T O L A R G E R S T O R E S


0 1 20 1 1

O C C U P I E R M A R K E T O V E R V I E W

T H E B I G N E W S

The grocery sector continues to

experience extensive M&A activity. In

this report we have previously discussed

Amazon/Whole Foods, Sainsbury’s/Argos

and the Tesco/Booker hook-up. Now all

eyes are on Sainsbury’s/Asda.

The proposed £13 billion mega-merger

between Sainsbury’s and Asda will

create a grocery goliath, commonly

referred to as ‘SASDA’, which would

eclipse Tesco in terms of sales and

market share. This will have a significant

impact on the grocery market.

Both operators have stressed that the

intention is for the two brands to

continue to trade as separate companies.

However, assuming it is approved by the

Competitions and Markets Authority

(CMA) without the requirement for a

material number of disposals, the newly

merged company will have significantly

increased buying power – not only from

suppliers but also from property owners.

M E R G E R M A N I A

The real driver of the ‘SASDA’ merger is

the advantages of the global buying

power of Asda’s parent company,

Walmart, and the protection this brings

against Amazon’s growing ambitions in

the grocery sector.

This quest for scale is part of a wider

worldwide trend that has accelerated

in a post-digital era where, for pure

play operators no profit = no problem.

After an encouragingly open-minded

initial approach from the CMA to this

proposed transaction, whereby they

have agreed to take Aldi and Lidl into

account in reaching a decision, their

latest procrastinations on the subject

have indicated a slightly more

negative view of the deal.

As we go to press, we await their

verdict as to whether they are going to

let the sector continue to reshape

itself or whether the terms that they

impose on any transaction will

effectively prevent the merger from

taking place.

The effect that e-commerce has had on

the general Retail market is now well-

understood. In the grocery sector, all

operators’ margins will continue to come

under pressure. In contrast, Amazon can

play a longer game until it secures a

foothold in the sector. If Amazon arrives

in the grocery sector before the existing

operators are fully prepared for battle,

the effects are likely to be destabilising.

F O R P U R E P L AY O P E R AT O R S I T A P P E A R S : N O P R O F I T = N O P R O B L E M


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D I V E S T M E N T O F S A I N S B U R Y ’ S

/ A S D A S T O R E S ?

During the first round of the CMA’s

investigations they identified 463 stores

which are “under risk of reduced

competition” as a result of the merger

(made up of 238 Asda and 225

Sainsbury’s stores). To put this into

perspective, Sainsbury’s currently have a

total of 608 supermarkets, while Asda

have 631 – producing a total of 1,239

supermarkets. Irrespective of the

anticipated £500 million “buying

synergies” resulting from the merger, the

closure/divestment of between 225 and

238 stores (18.7 per cent of the total

store portfolio) would clearly be an

unacceptable loss of market share and

company value.

A revised approach by the CMA that

includes the impact of Aldi and Lidl is

now underway. The latest research by

Maximise UK indicates a significantly

lower number of locations affected (c. 73

- half of which being from each brand).

Findings along these lines are expected

in February 2019 and could be sufficient

to make the merger worthwhile.

In the event that divestment of a

material number of stores is required,

the question arises, who would be in the

market to acquire them and, if so, at

what price? Demand for new stores in

pioneering locations is mostly limited to

a single operator. However, this is not to

say that there would be no demand for

an existing, successful, fully fitted

trading supermarket – with proven

customer goodwill and profitability. If

Sainsbury’s/Asda are prepared to

consider a sale to their direct

competitors, it will be interesting to see

whether competition between Tesco,

Morrisons and potentially Amazon (along

with the discounters where a site can be

sub-divided) is sufficient to realise the

book values for these stores.

M O R R I S O N S C O N T I N U E T O

E X PA N D C A U T I O U S LY

Morrisons is the principal grocer in the

market for new supermarkets in

“pioneering locations”. They are seeking

opportunities for “food only” stores of up

to c.45,000 sq ft GIA (25,000 sq ft net

sales) in locations where they currently

lack representation and a gap in food

store provision exists. As a result, they

are in a strong position to be able to

dictate terms on a new letting. The

landlords’ fall-back position is the rental

value for an alternative use. For a retail

site, this could be non-food retail

warehousing (where the market is

similarly weak at present) or a smaller

food store let to a discounter with

additional non-food retail units adjoining.

Bearing in mind the capital values for

large supermarkets, landlords can afford

to be generous on the terms/incentives

they offer. What they lose in income they

can often they can often more than make

up for in the improved capital value and

better terms/income from other non-

food tenants in the park. The recent

letting to Morrisons in Kirkby, Liverpool is

a prime example. The store measures

c.45,000 sq ft and anchors a small retail

park. The rent was agreed at £14 per sq ft

headline, with significant incentives over

the first five years of the term. We

understand a similar transaction is in

hand in the North East of England.

D I V E R S I F I C AT I O N / W H O L E S A L E D R I V I N G P E R F O R M A N C E

Leaving aside the questions over the

‘SASDA’ merger, performance by the major

operators has been particularly geared to

their wholesale/supply operations. Tesco’s

acquisition of Booker was completed in

2018 and all the signs are that the merger

has been a success, with Booker growing

by c.14.3 per cent during the first quarter

of trading of the newly merged company.

The company continues to focus on

additional “synergy benefits”.

Tesco also announced a strategic buying

alliance with Carrefour in France to seek

better terms with suppliers and opened

two “Jacks” discount stores in existing

mothballed stores in Chatteris,

Cambridgeshire and Immingham,

Lincolnshire. There are currently plans to

roll out 10 to 15 Jacks stores, although

Chief Executive Dave Lewis commented

he has “no plans to give the parent

company a bloody nose”.

At the same time, Morrisons’ vertical

supply chain has been paying dividends,

with the business as a whole growing by

c.5.6 per cent, of which the wholesale

business contributed c.4.3 per cent growth.

Sainsbury’s targeted £160 million of EBITDA

synergies, following their acquisition of

Argos, have been realised nine months

ahead of schedule. Online grocery sales

increased by 6.9 per cent and general

merchandise sales grew by c.1.5 per cent

(courtesy of Argos). The grocer also opened

an experimental new look supermarket in

Selly Oak, Birmingham featuring a dine-in

food market, 180 seat food court, store-in-

store Fragrance Shop, Argos and Habitat

units, along with one of the first of its

new concession outlets with Oasis.

H I G H - E N D C H A L L E N G E S C O N T I N U E

Meanwhile Waitrose were under

increased pressure with seven weeks of

falling sales reported towards the end of

the year and the John Lewis group

reporting a 98.8 per cent fall in underlying

profits for the first half of the year. They

sold five “Little Waitrose” stores in

Greater London to Co-op and Aldi and

closed their 40,000 sq ft underperforming

supermarket in Staines, Surrey.

M&S announced the closure of 14 more

stores in 2018/2019 with a total of 100

stores to close by 2022. However, at the

end of the year, M&S reported the

appointment of Justin King as a Non-

Executive Director. This has been well

received as before his 10 years as Chief

Executive of Sainsbury’s, he was a

pioneer of M&S Simply Food and before

that, part of the leadership team

responsible for the turn-around at Asda.

A L D I & L I D L

At the same time, Aldi and Lidl have

continued to power ahead in their

expansion plans, with Aldi taking a further

70 new stores and Lidl opening a further

50 new stores during the year. From

existing estates of 775 stores and 700

stores respectively, the companies are

both planning to have c.1,000 stores a

piece by 2022. This will continue to put

further pressure on the competition.

With supply chain concerns in the run-up

to Brexit, the supermarkets are hoarding

hundreds of thousands of sq ft of

warehousing space to cope with the

potential disruption. Meanwhile, the

grocery market continues to evolve and

business remains challenging. We expect

to see further innovative solutions over

the coming year to attract new

customers and improve efficiency.


0 1 60 1 5

E V E N T S T I M E L I N E T H E S U P E R M A R K E T S E C T O R I N 2 0 1 8

350

300

250

200

150

100

50

0

JA N U A R Y • Lidl branded

Britain’s fastest

growing

supermarket with 16

per cent growth

over Christmas

period

F E B R U A R Y • Arbitration award

on Morrisons 60,000

sq ft store in Wood

Green, London N22

at £24.50 per sq ft

(up from £24 per sq

ft)

• Iceland vow to

eliminate plastic on

all own-branded

products

• Invesco acquire

81,000 sq ft

Morrisons,

Colindale, NW9 for

£43 million (4.57%

NIY)

M A R C H • Tesco completes £4

billion Booker

acquisition

A P R I L

• Rumours of

possible merger

between major

operators

M AY • Sainsbury’s/Asda

announce £13 billion

mega-merger

• Investra acquire

86,000 sq ft

Sainsbury’s in

Edinburgh for £27

million (5.5% NIY)

J U N E • Rent review

settlement on

Morrisons’ 51,000

sq ft store in

Peckham, London

SE15 at £24.50 per

sq ft (up from £24

per sq ft)

J U LY • Tesco announces

strategic buying

alliance with

Carrefour

A U G U S T • Initial CMA findings

on ‘SASDA’ merger

that 463 locations are

under risk of reduced

competition

• Arbitration award on

Sainsbury’s 35,000 sq

ft store in Surbiton,

Surrey at £21 per sq ft

(down from £21.50 per

sq ft)

S E P T E M B E R • Tesco opens first

two “Jacks”

discount stores

O C T O B E R • Morrisons

announces positive

growth of 5.6 per

cent, driven by

wholesale business

N O V E M B E R • OLIM acquire 21,000

sq ft Aldi in Romford,

Essex for £11 million

(3.35% NIY)

D E C E M B E R • Supermarkets

hoard hundreds of

thousands of sq ft

of warehouse

space to stockpile

goods in run-up to

Brexit

• Arbitration award

on Waitrose 39,000

sq ft store in

Putney, London

SW15 at £22 per sq

ft (down from

£22.50 per sq ft)

SH

AR

E P

RIC

E

SAINSBURY’S

TESCOMORRISONS


0 1 80 1 7

UNDERSTANDING SHOPPER BEHAVIOUR IS A VITAL COMPONENT OF ASSESSING STORE PERFORMANCE.

Since Colliers launched its Supermarket

Vitality Index (SVI), it has analysed more

than 3 million sq ft of store space in the

context of over 20 data metrics.

The depth of that analysis has now taken a

huge leap forward through the index’s

ability to assess actual shopper behaviour

directly related to a store.

Through a partnership with specialist mobile

data firm, PlaceDashboard, the Supermarket

Vitality Index (SVI) now delivers unrivalled

insight into store performance.

Mobile data delivers powerful insights into

store visit frequency, dwell time and ‘cross-

shopping’ – which other supermarkets

shoppers visit. Crucially, shopper behaviours

are benchmarked against the wider portfolio

of an operator, delivering the latest view on

ranking and providing sought-after historical

performance trend data. Furthermore, new

‘Shared Audience’ insights provide a unique

perspective of local shopper flows between

stores of the same operator, to outline future

risk of closure.

With the addition of customer behaviour

metrics, the SVI provides the complete

assessment of the current health and

future prospects of any supermarket

in the UK.

To couple with a full update of all data

inputs for 2019 are several new insights

available for store reviews including:

C O L L I E R S S U P E R M A R K E T V I TA L I T Y I N D E X

W H AT I S T H E S U P E R M A R K E T V I TA L I T Y I N D E X ?

The Supermarket Vitality Index,

underpinned by years of site assessment

experience in the grocery sector, combines

Colliers in-house data with third-party

sources to rank every UK supermarket

based on a view of current performance

and future potential.

In a single output, through leveraging over

20 unique data inputs and forecasts

commonly used by the major grocers, the

SVI provides an in-depth critical view of the

health of a supermarket asset.

The flexible and simple reporting output

ranks any supermarket against other

assets in a specific portfolio, in the same

town or under the same fascia.

Whilst supermarkets remain a relative safe

haven for investors seeking secure long-

term income, every asset is unique and by

no means immune to impact from local

shifts in consumer attitudes and behaviour.

Indeed, if the current and future value of an

individual supermarket asset is to be truly

recognised, a comprehensive ‘bottom up’

analysis of local catchment dynamics -

leveraging the techniques and

perspectives applied in the bricks & mortar

strategy at the major grocers - has never

been more important.

1 million uniquely

identified phones

tracked

3 billion anonymous,

GDPR compliant data

points every month

5,000+ town centres,

retail parks & shopping

centres measured

P L A C E D A S H B O A R D T R A C K I N G S U P E R M A R K E T S H O P P E R S

660+ Retail &

Leisure brands

tracked

80,000+ retailers, food &

leisure venues tracked

for visit frequency,

dwell time & loyalty

Actual shopper

postcode catchment

mapping

Detailed demographic

alignment profile,

by operator

Convenience

competition,

in relevant catchments

Concessionary

space use

Online shopping

performance

M E A S U R I N G S T O R E P E R F O R M A N C E


0 2 00 1 9

F U T U R E P E R F O R M A N C E M E T R I C SC U R R E N T P E R F O R M A N C E M E T R I C S

I N S I G H T S

S U P E R M A R K E T V I TA L I T Y I N D E X

T R A D I N G P E R F O R M A N C E

C U S T O M E R B E H AV I O U R

C AT C H M E N T

C O N F I G U R AT I O N

C O R P O R AT E P E R F O R M A N C E

O N L I N E

F U T U R E I M PA C T

G R O W T H P O T E N T I A L

C LO S U R E R I S K


0 2 20 2 1

PLEASE CONTACT:

JAMES WATSON Head of Retail

Capital Markets

james.watson

@colliers.com

+44 20 7344 6877

MATTHEW HOBBS Head of Retail

Lease Advisory

matthew.hobbs

@colliers.com

+44 20 7344 6843

MATTHEW THOMPSON Associate Director

Retail Strategy

matthew.thompson

@colliers.com

+44 20 7344 6817

GREG STYLES Head of Retail

Development

greg.styles

@colliers.com

+44 113 200 1818

COLLIERS.COM

This report gives information based primarily on Colliers International data, which may be helpful in anticipating trends in the property sector. However, no warranty is given as

to the accuracy of, and no liability for negligence is accepted in relation to, the forecasts, figures or conclusions contained in this report and they must not be relied on for

investment or any other purposes. This report does not constitute and must not be treated as investment or valuation advice or an offer to buy or sell property.

Colliers International is the licensed trading name of Colliers International Property Advisers UK LLP (a limited liability partnership registered in England and Wales with

registered number OC385143) and its subsidiary companies, the full list of which can be found on www.colliers.com/ukdisclaimer. Our registered office is at 50 George Street,

London W1U 7GA (18325)

This publication is the copyrighted property of Colliers International and/or its licensor(s). © 2019. All rights reserved.

UK GROCERY REAL ESTATE REVIEW - Colliers Retail Capital ...€¦ · otherwise occupied, the fight...

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Transcript of UK GROCERY REAL ESTATE REVIEW - Colliers Retail Capital ...€¦ · otherwise occupied, the fight...