Bernard Ginns: Don’t lament cement yet, there’s a place for retail centres

MORE on the ongoing bricks-versus-clicks debate as the digital revolution continues to wreak havoc on the retail sector.

The latest contribution comes from Robert Noel, the Bradford-born chief executive of Land Securities.

He is responsible for a retail portfolio with a capital value of £4.75bn, but does not look at all ruffled by the challenge facing a significant part of his business.

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Britain’s largest commercial property company has a big exposure to retail at a time when increasing numbers of consumers are buying everything cheaper online.

Our surroundings for the interview are auspicious. We are sitting in one of the new D&D restaurants crowning his company’s creation, the £350m Trinity Leeds shopping centre.

It is before noon and waiting staff are hurriedly finalising preparations for a celebratory lunch for the great and the good of the city on launch day last Thursday.

Mr Noel is in Leeds to open the new centre and has granted me an interview. I ask him where he thinks we are in the great technological shift.

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“There is more change to come. Twenty years ago a UK retailer could access 50 per cent of the UK retail spending from 200 locations.

“Today that figure is probably closer to 60 locations. Retail is polarising and it is polarising towards centres which are dominant in their catchment.

“If you are a retailer looking to open a store you will go into the dominant centre of the catchment, whatever catchment it is you are trying to get.

“The catchment here is Leeds city centre. Don’t forget we have White Rose as well and we are absolutely convinced both of those are dominant in their sector and will trade very well side by side.

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“We have plans to extend White Rose this year, we want to put a cinema in there, more food and beverage, we have absolutely got support from the South Leeds community and we are discussing our plans with Leeds City Council.

“We very much hope the council will support us. Land Securities has been a supporter of Leeds for 20 years and it’s a two-way street.”

Leaving aside physical catchment areas, what about the rising threat of Amazon and Google? How can Land Securities compete effectively with them?

“The landscape is becoming increasingly difficult but I say not everyone can have home delivery. People want to touch and feel. And people feel safe going into shops and feeling before they buy them. They also feel safe going into shops and taking things back.

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“When you take things back, you might find something else. A lot of retailers are realising if they can fulfil people’s orders online, great; they allow people to bring them back into the store; they need stores to allow people to bring them back; those people will spend more money when they come into the stores. It’s a symbiotic relationship.

“Amazon can’t do everything. There are various retailers who are real winners at this. Next is a prime example. John Lewis is another example.”

I ask Mr Noel if he feels he is operating on a level playing field with Amazon and Google.

His director of communications chips in: “Do you mean tax?”

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Just generally, I say, adding that tax is an issue. (MPs have criticised Amazon and Google for not paying more tax in Britain.)

Mr Noel doesn’t bite. “If you are a consumer, Amazon appeals to a certain type of person. Someone who’s in a hurry, who just wants complete convenience.

“That doesn’t apply to the population. It will never apply to the population. People like agglomerating. They like the sense of community. They like the hustle and bustle. There will always be a place for bricks and mortar retailing.

“There’s absolutely less demand than there was. There are parts of this country which will never be reoccupied by retailers and there are marginal high streets, I’m afraid, which will suffer.

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“But you have to accept it’s time to move on. It’s rather like the Hackney carriage driver a hundred years ago who drove a horse and cart. If he didn’t buy a motor car he was out of business.”

I wonder aloud if Google Glass will be able to recreate the hustle and bustle of bricks and mortar?

The Silicon Valley giant has developed glasses, which can take pictures, record video, and do other things like a smartphone. Create your own reality, in other words. It hits the market next year.

It’s a question too far for Mr Noel. This Yorkshireman responds by wishing that the people of Leeds will support the endeavour that Land Securities has put into the city.

The bricks-versus-clicks debate rumbles on. However big and powerful Amazon and Google become, and there is a view that the state should check their rise, it is too early yet to lament cement.