It is the country’s second city, but is Birmingham the right location for retail expansion? Drapers takes a trip
A mention of Birmingham will more often than not be answered with an offhand dismissal of the city, or a derogatory impression of the Midlands drawl. However, a bastion of UK manufacturing and now home to the world’s largest fashion retail store, Birmingham’s position as an epicentre of fashion retail should not be under-estimated.
Primark opened the doors to its 160,000 sq ft mega-store on Birmingham High Street in April and it is pulling the crowds to a city that is undergoing a remarkable transformation. Coach companies are now even marketing overnight trips from as far as Bognor Regis and Scunthorpe to visit the five-floor retail experience.
“It’s been quite some time since we’ve had a store that can draw people from a 50-mile radius, and a much wider catchment than perhaps before,” Doug Tweedie, director at Birmingham property consultancy FHP tells Drapers. “The pulling power of that store is brilliant.”
The spotlight is very much on Birmingham, following the launch of its 20-year multimillion-pound Big City Plan, which launched in 2010. As a result the city will diversify its high street retail offering, opening up Birmingham for a bustling independent scene, while still pulling in international brands.
Birmingham’s £28.1bn economy has grown by 27.7% in the last five years. It is now one of the best regions for foreign direct investment in the UK and more international companies call it home than any other area of the country, the Department for International Trade reports.
Birmingham has a very proactive political and council operation. The system is set up to get stuff done
Robin Dobson, retail development director at Hammerson
Last year it was the most popular destination in the UK for people relocating out of London, according to data provided by the West Midlands Growth Company. And these newcomers are spending.
“Our research shows that retailers in [our Birmingham locations] perform 46% better than the national average when it comes to sales densities,” says Kate Orwin, UK leasing director at Hammerson, owner of the two main retail developments in Birmingham: Bullring and Grand Central.
“We see when we’re talking to [international] brands coming to the UK that Birmingham is top of that location list after they’ve established a foothold in London.”
|Birmingham’s retail hot spots||Size||Completion||Details|
|Grand Central Shopping Centre (Birmingham New Street station)||435,000 sq ft of retail space||2015||£600m regeneration of the existing Birmingham New Street station including retail and restaurants|
|Birmingham Smithfield||42 acres||to be confirmed||£500m scheme over 42 acres to include residential, retail, leisure, public space and integrated public transport|
|Selfridges, Birmingham Bullring||250,000 sq ft||2018||£20m redevelopment of the Selfridges (with ongoing development and investment)|
|Primark||160,000 sq ft||Opened April 2019||The world’s largest fashion retail store (Guinness Book of World Records)|
|Mailbox Birmingham||100,000 sq ft retail space
||2015||Retail, hotel and leisure space backing onto the city’s canal network|
|The Custard Factory, Digbeth||24,000 sq ft retail space||2010||Independent shopping destination, with offices and leisure space and home to Asos’s technology hub|
Robin Dobson, retail development director at Hammerson, notes that many businesses find the city a safe haven for investment at a time of political and economic uncertainty.
Having the youngest population of the UK core cities according to the Office for National Statistics, this is to be expected, adds Tweedie: “We have definitely seen more European brands opening up. The young, affluent multi-cultural population with a heavy Asian influence, is certainly something that attracts international brands to the city.”
One retailer capitalising on this with its luxury brand offering is Selfridges. Its Bullring store underwent a £20m redevelopment which completed at the end of 2018.
The store’s general manager, Sam Watts, says: “Many of our luxury brands are city exclusives and are often hard to find outside London. Birmingham is really owning its leading regional capital status, as evidenced by the huge amount of investment driven right across the city, as well as the added financial and reputational benefits from hosting the forthcoming Commonwealth Games [in 2022].
Locals are pushing away from commercialism and want to dress more ‘Birmingham’
Hemal Chauhan, co-founder of Bene Culture
“There are many parts of the city undergoing development, not only in residential, commercial and retail, but also in infrastructure, too, such as HS2 [the high-speed rail network linking London with Leeds and Manchester via Birmingham].”
As Watts points out, the city’s retail opportunity has largely been bolstered thanks to the local public sector’s proactive approach to investment.
Colliers International’s Midsummer Retail Report 2019 states: “2018 can be viewed as the year that the various stakeholders in [Birmingham] town centre finally woke up to the scale of the challenge, with councils … looking to safeguard the future of once-thriving town centres.”
This includes both direct investment in shopping centres to promote regeneration in the city and renegotiation on leases across Birmingham – investment that had been needed for some years, Edwin Bray, partner at Deloitte and author of the annual Birmingham Crane Survey of construction projects, argues: “It was really important that Birmingham united under one clear message, and some of the foreign direct investment that has been attracted would not have happened without a true partnership between the public and private sector.”
“Birmingham is open for business, both locally and globally,” agrees Dobson. “Birmingham is a high-growth city, but it has a very proactive political and council operation, to encourage investment and development through its masterplan framework. The system is set up to get stuff done.”
Independents on the edges
Yet as Birmingham’s core burgeons, many independent retailers feel they are missing out on the investment in its “tight [central] retail pitch”.
“There’s lots of players pushing in different directions,” says Mark Howard, owner of Disorder Boutique in Needless Alley, to the north of Grand Central, of the investment bodies such as BIDs (business investment districts), the council and developers. “With every development in the city, the retail hotspot moves around. More independents are popping up in the small units outside the centre because otherwise it’s too expensive.”
More independents are popping up in the small units outside the centre because otherwise it’s too expensive
Mark Howard, owner of Disorder Boutique
High business rates make it difficult for independents to afford central locations. Howard says Disorder’s rocketed by 300% following the rating revaluation three years ago.
Source: Martin Pettitt
Raheel Zahoor, owner of Onu designer menswear store on Stephenson Street, north of Grand Central, agrees that independents needed more support from local authorities: “The likes of Harvey Nichols and Primark don’t need advertisement. There’s not too many independents left now, and they need to not just focus on the redevelopments but to advertise independents.”
However, as the completed £600m regeneration of New Street station and £50m development of Birmingham’s Mailbox shopping location continue to pull shoppers into the centre, now is the chance for independents to make their mark in developing areas of the city.
Areas such as Digbeth have a huge sense of community now
Matt Roden, head tailor at menswear independent Clements & Church
“Looking forward, we’re likely to see a growth in terms of the more specialist and independent retailers,” Bray predicts. “The sector is well served by the big chains, but it is lacking in the small independents, which is where I see a stronger link with office workers and residents of Birmingham, as well as people coming from a wider catchment area.”
While retailers such as Oi Polloi and End are well known beyond Manchester and Newcastle respectively, Birmingham’s independent fashion retail reputation is still developing.
“The independent scene is starting to grow slowly again. For a long time, there weren’t a lot here, but we’re starting to see a real resurgence now,” Matt Roden, says head tailor at menswear independent Clements & Church, which is north of the city centre, near Birmingham Snow Hill station. “Areas that were kind of desolate and simply warehouse buildings are being invested in to create retail centres. Areas such as Digbeth have a huge sense of community now.”
Often heralded as the “Shoreditch of Birmingham”, like its London counterpart, Digbeth is a mismatch of industrial buildings, and innovative retail and leisure concepts, most notably, the Custard Factory. Located on the site of the former Bird’s Custard Factory, the independent shopping destination is home to a menagerie of creative businesses, including menswear independent Bene Culture.
“The Custard Factory is great for start-ups. Rents are low and, while footfall isn’t the best, it allows you to refine your retail service,” says co-founder Hemal Chauhan.
The biggest step change isn’t going to be in the city core. It will be in the other supporting areas
Doug Tweedie, director at Birmingham property consultancy FHP
“Ever since Primark opened, we’ve seen an influx of customers voicing that they want to shop more independent,” he adds. “Locals are pushing away from commercialism and want to dress more ‘Birmingham’.”
Planned extensions to the tram service in Birmingham will soon link the Bullring with Digbeth, where a new retail development, Smithfield, is about to take shape. The £1.5bn regeneration of the 42 acre site of Birmingham’s former wholesale market site, to the south of the Bullring, will widen the retail heart of the city, reconnecting Digbeth and opening up opportunities for independent retailers in the surrounding area.
“The biggest step change isn’t going to be in the city core,” says FHP’s Tweedie, “it will be in the other supporting areas.”
Now secure in its high street fashion offering, Birmingham is ripe for an independent renaissance. Primark bags will inevitably continue to pepper the High Street and beyond, but the city’s young and affluent population is searching for diversity, and brands should take note.