Belfast Telegraph

Sunday 21 September 2014

Expansion rates for store chains slow down

Last month Tesco said it would use land it had previously earmarked for new supermarkets to build 4,000 homes. It had come under fire for hoarding land on which an estimated 15,000 homes could be built
Last month Tesco said it would use land it had previously earmarked for new supermarkets to build 4,000 homes. It had come under fire for hoarding land on which an estimated 15,000 homes could be built

Supermarkets have slammed the brakes on their race for space and downsized plans for new sites to their lowest level since the 2008 financial crisis.

Grocery retailers proposed 15.2m sq ft of new shopping space at the end of March, compared with a high of more than 18m sq ft in 2010.

But the big four supermarkets have since come under increasing pressure from discounters such as Lidl and Aldi, which plan to double the number of their smaller retail stores in the next decade as they enjoy record sales.

The figures from property agent CBRE also show the amount of new shopping space with planning permission and under construction fell 30% on the year to 2.5m sq ft, with retailers scaling down their sites to meet changing customer habits.

CBRE retail director Christopher Keen said: "The reason for the shift to smaller stores is in part a response to changing consumer shopping patterns, but also because they are lower capital expenditure to deliver, have less impact on the trade of existing stores, and are easier to secure planning permission for."

Despite reining in their expansion plans overall, supermarkets are still sitting on nearly 30m sq ft of space that has been given permission to become a grocery store but is not under construction, up around 14% on the year.

Last month Tesco said it would use land it had previously earmarked for new supermarkets to build 4,000 homes. It had come under fire for hoarding land on which an estimated 15,000 homes could be built.

Britain's largest supermarket has also become an unfortunate poster child for the plight of the country's larger grocery retailers. The group recently ousted chief executive Phil Clarke when it announced another profit warning.

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