Supermarkets abandon more schemes as pressure mounts on Sainsbury’s, Morrisons, Asda and Tesco
The number of developments ditched by Britain's supermarket titans has jumped since the first half of the year, with construction and planning applications also in decline, new research shows.
Property advisory firm CBRE's latest analysis of the grocery property market shows that the number of abandoned schemes rose by 13.3 per cent in the second half of 2015.
Proposed projects fell by 14.8 per cent while the number of new stores under construction also dropped by 14.8 per cent, meaning that the overall grocery pipeline shrunk by seven per cent in the period.
The Big Four supermarkets have been cutting back their expansion plans in the wake of deteriorating sales, sliding footfall and more people shopping online. Instead they have been focusing on adapting existing stores in a bid to cut costs and better compete with the discounters.
Sainsbury's, for example, has introduced concessions such as Timpson, Jessops and Argos as a way to drive more shoppers into its stores. The latter tie-up has also prompted the supermarket's current bid for its parent company Home Retail Group.
Meanwhile Asda has partnered with Decathlon, who will open concessions in its stores, while Tesco is trialling Burton and Dorothy Perkins outlets in its stores.
"In the future, Aldi and Lidl will be the main contributors to the UK grocery pipeline to support their ambitious store targets. Tesco, Sainsbury's, Asda and Morrisons are likely to submit significantly fewer planning applications for new stores than in previous years due to their large banks of consented sites," CBRE said.
Recent figures from Barbour ABI show that Aldi has submitted 93 planning applications to build new stores in 2015, up to November, while its smaller rival Lidl filed 78. That contrasts with the 29 planning applications submitted by Tesco, Morrisons, Sainsbury’s and Asda combined.
In February, Aldi announced plans to open 80 new stores in the UK this year, creating 5,000 jobs in the UK. Meanwhile Lidl announced a fresh assault on the capital at the end of last year, with plans to open a huge swathe of stores in upmarket boroughs such as Fulham and Mayfair. It wants to double in size and eventually operate 1,500 UK stores.
