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Author:
Content Marketing Manager
Last Updated:
12th November 2024
Larger retailers are investing increasing sums in updating and expanding their physical presence which in turn is creating significant opportunities for new work contracts.
Major players such as Marks & Spencer and John Lewis are investing heavily in their stores whilst expansion work in retail parks is also generating new construction contracts. Meanwhile, the major supermarkets, notably Aldi and Lidl, are continuing to expand and modernise their estates.
The revival comes as larger retailers across Europe are re-discovering the potential of their bricks and mortar operations as sales drivers against a background of improving consumer confidence.
A recent survey by agents CBRE of 60 of Europe’s major retailers operating a total of 130,000 stores found that 72% have plans for further expansion of their physical stores with sites in retail parks seen as a priority. Retailers in the ‘athleisure’ and fashion sectors located in gateway and capital cities are particularly seeking larger stores.
The trend chimes with the June edition of the Glenigan Construction Forecast 2024-26 which predicts a 5% increase in retail starts in 2024 year followed by growth of 3% in 2025 and a 19% increase in 2026. Meanwhile, the latest Glenigan Construction Review shows that retail work starting on site was worth £522 million during July-September, up 3% on the previous three months.
John Lewis has recently unveiled a major makeover of its Oxford Street store as part of an £800 million investment over four years to revive its appeal to middle class shoppers. Around half of the sum is set to be spent on updating its 34 stores.
Glenigan data shows that detailed plans have been granted for John Lewis Partnership’s £91.2 million Chandos project to alter and refurbish its Oxford Street flagship base across a floor area of almost 28,000 sq m. Work is set to start early next summer and run for two years (Project ID: 20427779).
Marks & Spencer is also investing heavily in expanding and renewing its store portfolio, particularly in food. It plans to open nine new food locations in the current financial year and to accelerate its investment in renewal, completing around 25 schemes and boosting its pipeline of openings. The retailer’s New Simply Food stores typically cover 13,000 sq. ft. of space, up from around 8,000 sq. ft. currently.
M&S is awaiting a decision by housing minister Angela Rayner on a controversial scheme to demolish the group’s existing Oxford Street store and replace it with a nine-storey mixed-use retail/office/gym development. If it gets the go-ahead, the £106.1 million Project Swan-Marble Arch (pictured) may well be a spur to further development in the local area (Project ID: 21108674).
Glenigan data provides details on the numerous other M&S construction projects of varying sizes that are in the pipeline. For example, a £600,000 supermarket conversion for the retailer at One Cabot Circus in Bristol is at the pre-tender stage with work set to start next year (Project ID: 24197827).
Supermarkets’ spree
Meanwhile, the major supermarkets are continuing to generate new construction work through investment in their stores. The October edition of the Glenigan Construction Review shows that supermarket starts grew by 32% during July-September, compared to a year earlier, and accounted for almost half of all retail work starting on site.
Aldi stands out as the most prolific retail developer recently with 93 projects worth £145 million over the year to September, according to Glenigan data.
In September, Aldi unveiled plans for an £800 million investment to accelerate expansion in Britain with 23 new stores opening before the end of this year including sites at Muswell Hill, London and Mere Green, Birmingham. It is also refurbishing 100 existing stores this year and expanding its network of distribution centres.
Lidl is also expanding its estate and last month announced plans to open 10 new stores before Christmas. Sites where it is expanding include Berwick Green in Bristol, Bovey Tracey in Devon, and Stirchley in Birmingham whilst three new stores are set to open in London. Meanwhile, Lidl has agreed to a £70m joint venture between Roadside Real Estate Plc and Meadow Partners, involving 12 new stores.
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