A retail numbers game deciphered

Taken at first glance, the Local Data Company’s assessment of Nottingham’s retail health seemed pretty dire.
Here was one of the top retail destinations in the UK, and nearly a quarter of its shops were standing empty.
I know credit crunch and recession have been bad, but how on earth did that happen?
Well, I’m not sure it did.
We got hold of LDC’s data more than a week ago, but it has taken me several days to get to the bottom of the methodology underneath its shocking headline. On that basis, I decided not to proceed with a story based on the headline statistics alone because something about the numbers didn’t ring true.
So, how did LDC arrive at a figure which says that 23.6 per cent of Nottingham’s shops are standing empty?
Here are the answers. First of all, LDC didn’t do a specific survey about shop vacancies. It is a business which specialises in compiling data about property occupation in its widest form, which it then supplies in whole or part to clients which range from Google to Yell to Experian. They use it as the basis for their own socio-economic analysis and advice on targeting service or products.
So the LDC Shop Vacancy report is actually an analysis of only part of a wider set of data.
Crucially, there are also two other key differences between this and an examination of how many shop units are empty or occupied in what we might understand as Shoppingham.
One is that LDC’s definition of the city centre goes beyond the major shopping locations to take in what are known to the property industry as secondary and tertiary locations. It includes, for example, Alfreton Road and Derby Road, the railway station, Sneinton, Huntingdon Street and parts of Mansfield Road.
There are a lot of empty units there, and that’s because they are not part of the retail core, have weak footfall and sometimes poor trading environments. They will struggle at the best of times and in a post-recessionary climate they’ll be in particular difficulty.
Secondly, LDC’s data doesn’t count all shops – it only looks at those used for comparison shopping (like fashion), service retail (like shoe repairs) and convenience stores. It doesn’t include anything occupied by coffee shops, bars and restaurants.
Retail property agents I know were scathing about this decision in particular. Their view is that having a wide selection coffee shops and restaurants is an essential part of the mix for visitors to any major retail destination – in other words, the fact that units are occupied by Costa Coffee rather than a fashion shop is a good thing, not a bad thing.
The agents also said that the data (which was compiled in September last year) had been put together at a time when units in and around Broadmarsh in particular were beginning to empty ahead of a £40m revamp. Others, they insisted, were between lettings – something LDC’s surveyors would not have known.
When I eventually spoke to Matthew Hopkinson, who drew up the report, he said that taking out the vacancies around Broadmarsh would probably have knocked only a single digit off the number. Buit putting leisure uses back into the data would have knocked nearly four per cent off the vacancy rate.
To my eyes, 19-20 per cent vacant is still a high figure, but it probably reflects the decision to include those fringe areas which major retailers would never go near.
Mr Hopkinson (who does know Nottingham, by the way) admitted that at least some of the criticisms may have been valid. FHP, probably the major agency for retail lettings in Nottingham, estimates the true figure for what we know as Shoppingham is somewhere between 11 and 14 per cent.
The statistical discrepancies don’t mean some of the points made by LDC are not relevant. Major chains are constantly looking for bigger shop units so that they can properly display their ranges and exploit the click-and-collect trend – research and ordering of goods online, followed by touch, feel advice and collection in store. The city doesn't have enough big units.
In a weak consumer climate in particular, well-known brands remain vulnerable to discounters – whether it’s Tesco or Poundland, a bottle of Head & Shoulders is the same there as it is in Boots. But it might be cheaper. The supermarkets are also becoming big players in home electricals, and only first-rate service from very knowledgeable staff will stop people buying on price alone.
The city centre also has its problem areas. Flying Horse Walk (or the FH Mall, as it became) has never fulfilled its potential, the streets around the Market Square are surprisingly downmarket for a wonderful meeting place in the shadow of civic grandeur, and the supposed independent retail quarter in Hockley still feels like the poor relation.
Indeed, there are some massive opportunities in the centre for brave retailers and developers. We call it the Council House, but what I see is a great location for iconic brands like Harvey Nichols or Betty’s. Who knows…
Finally – as Mr Hopkinson correctly observed – a city that regards itself as a retail destination must make sure there is a steady stream of events and themed occasions to keep people entertained on a day out.
So, Nottingham is clearly not in the kind of trouble LDC’s numbers might suggest. The best part of £300m is about to be invested in expanding or improving the Victoria Centre and Broadmarsh and I know some major retail names are still waiting to come here.
But there’s still plenty for the newly-formed Retail Business Improvement District to get its teeth into.