UK construction activity March 2023: Retail

Project-starts, main contract awards and detailed planning approvals all experienced declines on the previous year. More positively, contract awards increased against the previous quarter, thanks to an increase in major project awards. 

Retail overview

Totalling £261m, retail work starting on-site during the first quarter of 2023 fell 4 per cent against the preceding three months to stand 48 per cent lower than a year ago. No major projects (£100m or more) commenced on-site, unlike the previous quarter and a year ago. Underlying project-starts (less than £100m) experienced a 32 per cent fall against the preceding three months on a seasonally adjusted (SA) basis and 48 per cent against the previous year.

Retail main contract awards totalled £336m, an increase of 8 per cent against the preceding quarter but a 40 per cent fall against the same period a year ago. The value of major projects totalled £130m during the period, an increase on the preceding quarter and previous year where no projects reached the contract awarded stage. Underlying contract awards decreased by 37 per cent (SA) against the preceding three-month period to stand 63 per cent lower than the previous year, totalling £206m.

Detailed planning approvals, totalling £450m, decreased 26 per cent against the preceding three months, to stand 3 per cent down on the previous year. There were no major planning approvals, which repeats the trend of the previous quarter and the preceding year. Underlying approvals fell 17 per cent (SA) compared with the preceding three months and decreased 3 per cent against the previous year.

Types of projects started

Supermarkets, totalling £174.5m, accounted for 67 per cent of all retail project-starts during the three months to March. The value of starts in this segment decreased 40 per cent on the previous year. Shop projects commencing on-site added up to £43m, a 70 per cent decline against the previous year to account for 16 per cent of the sector. Accounting for 8 per cent of the sector, petrol filling stations also experienced a decline of 7 per cent against the first quarter of 2022 to total £21.1m.

Shopping centres accounted for 3 per cent with a total of £6.7m, having decreased 35 per cent on the previous year. Unlike last year, there were no retail warehousing projects starting on-site during the period.

Regional

Scotland was the most active region, accounting for almost a fifth of all retail project-starts nationwide, thanks to the value doubling against the previous year to total £49m. Retail projects in Scotland included a £7.77m discount store and supermarket development in Glasgow . The North West was the only other region to experience growth, having increased 78 per cent on a year ago. The total added up to £37m, a 14 per cent share of the sector.

In contrast, despite having the second highest share of 18 per cent, projects starting on-site in the South East slipped back 16 per cent against last year, totalling £46m. London had the sharpest decline at 87 per cent bringing its total down to £19m, a 7 per cent share of the sector. Further decline in the capital was prevented by a £5.3m shopping centre alteration project in North London .The East of England (£18m) and the North East (£17m) also held the same percentage of the total value. Projects starting on-site in these two regions decreased 73 per cent and 34 per cent respectively. The East Midlands and the West Midlands each accounted for 5 per cent of project-starts, having declined 27 per cent and 61 per cent respectively.

The three months to March was a strong period for retail planning approvals in most of the UK. London had the highest proportion of retail approvals, with a 16 per cent share, jumping 77 per cent against last year’s levels, to total £73m. Consents in the capital were boosted by a £47.16m mixed use development in Southwark The East Midlands experienced an increase of 44 per cent in planning approvals, accounting for 13 per cent of the sector and totalling £57m, making it the second most active region. Growth in the region was accelerated by a £25m builders merchant development in Nottingham.

Approvals in Scotland climbed 7 per cent and totalled £48m, accounting for 11 per cent of the sector. At £41m, the North East accounted for 9 per cent of approvals, having grown 54 per cent. Northern Ireland and the West Midlands each accounted for 8 per cent of the sector, with the value increasing 10 per cent and 34 per cent on the previous year respectively. The North West, on the other hand, fell 2 per cent against 2022 levels to total £47m, despite accounting for a tenth of approvals in the sector.