The Divide in the Retail Property Market

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Posted in:Property and Construction, Real Estate|August 19, 2011 | Join the mailing list

Due to the recession the UK has developed an increasingly fragmented retail property market.

Many companies are still largely affected by the economic implications of the recession, whereas in certain companies, turnover and profitability have gone from strength to strength.

High street companies have been badly affected by the recession, and the continued growth of online retailing, and a number of high profile high street retailers such as Woolworths, Borders, Habitat and TJ Hughes have gone into administration and others have
announced downsizes. Most recently Carpetright, Britain’s leading floor cover retailer, announced in the last few days that it would continue downsizing its store portfolio by 24 stores as profits fell by 70.4% to £6.6million in the last year. Thorntons also
announced on 28th June 2011 that they planned to close up to 120 of its 364 stores as well as earmarking another 60 for possible closure.

However, despite this gloomy outlook conversely, there may be some evidence to suggest that the retail property market is also steadily growing. International retailers especially supermarkets such as Tesco appear to be thriving in the current market place,
and are continuing to extend their store portfolios. Sainsbury’s also appears to have overcome a faltering economic market and posted annual profits of £665m showing a 9% growth, largely due to extending their store portfolio to 934 nationwide with 68 planned
new stores. Finally Morrisons, the fastest growing supermarket retailer in the UK, posted annual profits of £767m.

Therefore, as the retail property market falters along the high street, supermarket retailers such as Tesco, Sainsbury’s and Morrisons are thriving in the current market posting record profits as well as extending their store portfolios, therefore demonstrating
how fragmented the current retail property market is at the moment. 

To discuss how we can provide further advice in connection with these issues, please contact Ian Barker, Partner and Head of our Real Estate team, by email to or alternatively you can call Ian on 0161 833 9211.

The information and opinions contained in this article are not intended to be comprehensive or to provide legal advice. No responsibility for article’s accuracy or correctness is assumed by Berg or any of its partners or employees.
Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of the contents of this article.

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