Appendix E Retail

City centre retail floorspace in Chester is estimated at 1.47 million sq ft, comparable with the Regional Centre average. Given the historic nature of much of the retail core, there is a relative shortage of modern retail units in the city centre with some retailers opting to locate out of town instead.⁷

Chester’s retail core is concentrated along the streets radiating outwards from The Cross, namely Eastgate Street, Northgate Street, Bridge Street, and Watergate Street. Along these main streets are the distinctive two-level timber-framed units The Rows. Traffic is excluded from much of the core area.

The changing fortunes of retail over recent years has been widely documented and the unprecedented circumstances resulting from the Covid-19 pandemic has made the challenges facing retail even more acute.

The closure of non-essential retail stores during lockdowns has put severe pressure on retailers’ revenues and will continue to affect their performance in 2021 and thereafter. For many retailers, this will mean continued pressure on margins, store rationalisation, investment in omni-channel strategies, and supply chain restructuring.

Prime Zone A rents in Chester peaked as early as 1999 when they reached £225 psf, before dropping back to around £200 psf in 2001. Rents then rose until 2009, before falling during the recession. Prime Zone A rents rose to recover much of the lost ground in 2011 and then stabilised until 2017 before falling sharply. The decline in prime rents in the city over 2017-2019 has been greater than average for Regional Centres, suggesting a more acute exposure to the wider challenges facing the UK retail sector.⁸

Prior to the onset of the Covid-19 pandemic, market conditions in Chester had continued to be challenging, with corporate failures and store rationalisation programmes affecting several pitches. Agents for Chester have reported a significant fall in prime rents from £205 psf in Zone A in 2017, to £185-£190 psf in Zone A in late 2018, and to £150 psf in Zone A by 2020.⁹

A study into retail rents in Chester by PMA illuminates the difference in desirability and demand in the retail core:

Retail rents at Foregate Street were in the region of £130-£150 psf;

Newgate Row and St Michael’s Row in the Grosvenor Shopping Centre could demand £100 psf and £75-£85 psf respectively;

Retail rents in Northgate Street were around £130 psf;

Rents for units on Bridge Street were seen to be variable, depending upon proximity to The Cross - agents generally consider units at the northern end of this pitch to achieve £60-£70 psf, with rents tailing off to £40 psf towards the junction with Pepper Street;

Evidence for Watergate Street was limited but is understood to be in the region of £65 psf. Rents for The Rows were thought to be generally lower because of their secondary position, raised above the main streets; and

Lettings at The Forum Shopping Centre are usually made on a short term or flexible basis in view of the planned redevelopment of the centre.10