A Savills report has found that the retail warehousing sector is on track for another positive year, with 510 new openings in the first half of 2023.
If the second half of the year follows this trend, it will mark the third consecutive year in which over 1,000 warehouses have been opened by operators in the retail sector.
Retail firms comprised eight of the top ten spots in Savills’ ranking of new openings by square footage in H1 2023. B&M Retail was top of the list, having opened 470,700ft² worth of warehouses so far this year. Second was Home Bargains, which has opened 19 units totalling 446,500ft², followed by Lidl with 22 new openings totalling 425,300ft².
The report notes that a third of all new openings in 2023 have been from discount or value-orientated brands; these companies now represent 38% of retail brands in the market – this figure having grown by 10% in the past decade.
Furthermore, it found that while “bulky goods brands” (DIY, furniture, home appliances) had 40% of occupied UK floorspace in 2012, this has since dropped to 25%. In this time, grocery stores have more than doubled their share of occupied floorspace, rising from 18% in 2012 to 31% today.
This could be indicative of consumer spending. The Barclaycard Consumer Spending Index shows a 5% rise in spending on groceries from June 2022 to June 2023 while spending on household, home improvement, electronic, and furniture goods has dropped.
Continued growth in the property market for UK retailers may be a surprise to some given the impact of economic challenges such as inflation on both consumers and businesses.
Sam Arrowsmith, Director of Commercial Research at Savills, said: “Despite the strength of the UK’s economic headwinds, the occupational market remains resilient, spurred on by the performance of retailers who sell essential goods and the expansion ambitions of the value-oriented operators”