Agenda

Here comes autumn, a season of such certainties – hours drawing in, leaves on the ground, the sound of wailing and gnashing of teeth from shopkeepers. The warning signs ahead of the Christmas sales season are so foreboding that we can safely predict copious amounts of blood on the shop floor come the post-sales reckoning.

The scenario may be a familiar one, but it is no less unpleasant to read. Retail analysts are warning of a “Christmas Armageddon”; retail stocks are plummeting as hopes of a rate cut recede just as energy price hikes buffet the consumer; the head of Marks & Spencer, exalting in a surprise turnaround in performance, predicts imminent high-street casualties.

Signs of bustle and activity in your retail park or high street should not be misconstrued. Read the discount labels and two-for-one offers to sense the panic, as the nightmare of stacks of unsold goods infects even top-brand retailers. The plethora of quite useless Hallowe’en merchandising was testament to the levels of desperation in the retail trade to squeeze every penny of disposable income from the shopper’s grasp.

The regeneration industry will be hoping that such a malaise doesn’t impact too significantly on the vibrancy of retail-led or retail-involved developments, those that are newly built, those being built, those in the planning.

It is certainly a hope rather than an expectation. The fall-out from higher energy prices on the consumer will hit every industry. But regeneration is particularly vulnerable. That’s not just because regeneration, with its long timescale, relies more than most on a robust or at least benign economy. Big-name listed retailers, the ones whose presence gives something of a stamp of approval to new developments with a noticeable retail segment, will have to re-examine the number and quality of all their far-flung commercial property outlets when the reckoning comes. It will be the least their shareholders will expect of them.

And when one board of one retailer begins to wonder whether that new store in that revamped high street in that town in Shropshire was such a good idea after all, others are bound to ask questions of their own investments. That is because most of these investment decisions are based on no more scientific a process as that found in the school playground: “we’ll open a shop in this new retail centre only if everybody else does”.

The reverse sequence of this process will be applied with the same paucity of rationale: “if one quits, we all quit”.

There is inevitably a large amount of guesswork about the retail potential of a new development based around an assumption that if you build new houses on a patch of land, it stands to reason that its residents would like a new shopping facility nearby.

Regeneration strategists will have to review their approaches against a backdrop of a fast-changing retail landscape

If only people were that straightforward. Shoppers are fickle. What reassessments will regeneration planners have to make, for example, to account for the growing tide of online shopping, which accounts for 9% of all shopping and which for the Christmas period coming is projected to increase by 70%?

Regeneration strategists will have to review their approaches against this backdrop of a fast-changing retail landscape. Matt Oakley of Savills, the property consultants, says retailers are focusing more on growing margins and that will mean concentrating on the best locations in the UK. Next and Boots, for example, are expanding into retail warehouses because rents are 30% cheaper. Where they were opening up new stores to drive turnover growth, with rising distribution and factory costs and rents, now they will be looking to close them.

The business demands of retailers are among a number of commercial realities the government is failing to address in its quest for sustainable communities. Another is the reluctance of residential developers to bow to demands to include retail in order to create a more rounded, sustainable community.

Short-termist and myopic such a view may look amid the grand vision of ministers and civil servants, but when the retail outlook is so bleak the short-term is all that counts for the industry.

Ministers, in any case, should worry about the immediate effect of the retail outlook on communities. As ever, it is the higher end of the retail scale, the luxury goods sellers, that will look after themselves. The squeeze will come in the less affluent parts of the country, where unemployment is higher.

Chain stores seduced into investing in catchment areas previously underserved in retail will only stay if they can see sufficient jobs growth in the community. Otherwise, although the shopper may benefit from closer proximity to retailers, all the retailers will see is a shift in income from one part of the country to another.

That may serve as a philanthropic gesture, but it is one that merely damages the bottom line.