- Investing in the UK retail market; A global opportunity
- Breaking down barriers
- What we found...
Investing in the UK retail market; A global opportunity
This research conducted on behalf of Revo and intu by Conlumino, demonstrates international retailers want to invest in UK but there significant barriers to entry that need to be addressed
Retail is one of the UK’s success stories: a vibrant and innovative sector generating £326 billion in sales each year and directly employing around 3 million people. Given its status, it is hardly surprising that many international retailers have made, and continue to make the UK a key target for their expansion activity.
It is easy to take this success for granted and to assume that the UK is meeting its full potential in terms of attracting international retail investors. This is not least because very little research has been done to explore why and how retailers make the decision to open up shop in the UK, and the challenges, difficulties and opportunities that they face.
This research addresses the issues. It provides views of a range of international retailers, exploring their key investment criteria and their attitude towards the UK as a potential or existing location to operate in.
The broad view of the UK is positive but it is competing with other countries for investment and must create a positive environment for retailers...
intu chief executive
Breaking down barriers
There's very little research on why and how retailers make the decision to open up shop in the UK, and we wanted to change that by working with Revo on this report
The research was conducted with three groups of international retailers (130 in total): those who have, or are, considering the UK as a market for expansion; those who have not considered the UK as a market for expansion; and those who have already expanded into the UK.
Across all groups, the broad view of the UK is positive. The country is rated as being attractive across most of the factors retailers were asked to assess. A solid economic growth rate, a sensible approach to labour relations, a low corporate tax rate, and sound digital infrastructure are all areas where the UK scores particularly well.
Retail is one of the UK’s success stories, generating £326bn in sales each year and directly employing around 3 million people.
Revo chief executive
What we found...
Understanding the opportunities and challenges
The vast majority of retailers survey (97%) mentioned the desire to expand into the UK using either standard size units or flagship stores across a range of locations.
However, the UK does not exist in a vacuum, it is competing with other countries for investment. Despite the positive sentiment around the UK, 73% of respondents said that they would prefer to expand into countries other than the UK.
If all those retailers considering the UK market were to do so they would, over five years, have generated:
annually in rent
in business rates and income taxes
At present the UK is unlikely to benefit from the entirety of this opportunity, mainly because many retailers are put off expanding due to a number of perceived barriers.
Some barriers are not easily changed, such as high levels of competition, which is arguably good for consumer choice. However, there are other barriers that we believe can be either overcome or mitigated against. These include business rates, the complexity of the planning regime, challenges with the tax system, and – especially for retailers less familiar with the UK – a lack of expertise and understanding of how to navigate the UK’s business environment.
Investing in the UK retail market
Read the report highlights
Making the UK more competitive and attractive for retail investment
Based on research, we've made eight recommendations for strengthening the UK’s appeal to international retailers. These include promoting the UK to international retailers, addressing issues relating to business rates, planning and providing more help to navigate the complex legislative and wider regulatory landscape.
Overall this new research demonstrates that by listening to retailers’ views and responding positively and effectively, the UK has a significant opportunity to make its thriving retail sector evenstronger. Government needs to seize this opportunity and we are ready to work with them to achieve this aim.
By listening to retailers’ views and responding positively and effectively, government and industry can work together to make the UK’s thriving retail sector even stronger