Grocers mothball sites after consumer revolution

Mark Teale, the head of retail research at property agent CBRE, told The Yorkshire Post that some supermarket schemes are being mothballed because the big retailers are waiting for better trading conditions.

A CBRE report found that, while the pipeline of space for new grocery stores in the UK is 46.61m sq ft, just 2.8m sq ft is being built. In Yorkshire, there is 4.45m sq ft in the grocery pipeline, with just 0.38m sq ft under construction.

Mr Teale said that the Yorkshire grocery pipeline included schemes at various stages of development, and it could be years before we know which of these schemes will fall by the wayside.

He added: “Some grocery operators continue to expand aggressively, such as hard discounters and convenience store operators. The development hiatus is currently affecting the main grocery end. What appears to be happening, as occurred in shopping centre and park markets post 2008, is that schemes are being parked awaiting an improvement in market conditions, which is the reason grocery development activity levels in 2015 are projected to dip.”

How things play out in later years will depend on grocery market conditions, after the current price war, Mr Teale said.

Clive Black, the head of research at Shore Capital, said that the UK supermarket scene is undergoing a revolution, with the major supermarkets deciding to open far fewer superstores. Mr Black believes that a lot of the big supermarkets’ undeveloped sites will eventually be sold on for alternative uses.

Chris Keen, director of supermarket leasing at CBRE, added: “The rapid pre-recession market share growth achieved by the ‘big four’ (Tesco, Asda, Sainsbury’s and Morrisons) was largely due to a huge wave of grocery stores released variously by the closure of Somerfield, Kwik Save, Safeway and Netto...It was when these easy gains finally dried up, five to six years ago, that the big four embarked on a major development push designed to protect market share gains. It is that development push that has now ground to a halt.”

Last year. Tesco scrapped plans for a new store in the heart of Ilkley, West Yorkshire, and announced that it planned to sell the site. Tesco will continue to run its existing Ilkley store. A Tesco spokesman said the disused site in Ilkley is on the market. Tesco also owns Batley Shopping Centre in West Yorkshire, which has been described by Andrew Marsden, the chairman of Batley Business Association, as “dead space” because most of the shops have been empty for years.

Mr Marsden added: “Hopefully, we are going to see a decline in huge supermarkets in towns, and a return to a balance between people buying from specialist independent traders such as butchers, florists, and bakers and then using supermarkets for items such as tinned goods.”

A spokesman said Tesco was keen to find new tenants for Batley Shopping Centre.

A spokesman for Leeds-based Asda said: “While we are not able to comment on the specifics of our property holdings, Asda does not own a significant amount of land outside of our store chain portfolio.”

A spokesman for Sainsbury’s said: “We regularly review our portfolio to ensure sites that are no longer part of our plans are alternatively developed.”

A spokesman for Bradford-based Morrisons declined to comment.