Catalyst Capital reviews the Westfield Stratford effect

There has been some debate as to likely effect of Westfield’s mega successful mega mall at Stratford City on the adjacent Stratford shopping centre and high street. One school of thought suggests that the long-term shopping centre will suffer substantially at the hands of its glitzier and bigger neighbour. Ilan Goldman of the shopping centre’s owner Catalyst Capital has written an exclusive piece for CoStar on his experience so far of the Westfield effect. It is printed below:

It has been two months since the opening of Europe’s largest shopping centre saw people flock in their thousands to London’s East End, and from all accounts, the crowds have kept on coming.

Despite a tough retail market which is suffering from low consumer spending, Westfield Stratford City was said to have attracted around 150,000 people in its first day of trading, delighting the centre’s retailers and owners as they welcomed potential shoppers in their hordes.

As the owner of the Stratford Centre, located directly opposite Westfield Stratford City, many of our industry colleagues and the media expected us to be disgruntled about the high footfall levels our neighbour was boasting. Surely this would suck the trade from our centre and cripple our traders?

Well, the short answer is no.

The truth is that Westfield’s presence has sent our own footfall soaring. The week the centre opened, we saw a 60% increase of shoppers come through our doors.

Trading figures climbed and we enjoyed our prime position to promote our own retail offer. In September our footfall figures were up by approximately 37% compared to the same time last year and our annual footfall for 2011 will be around 24 million.

The fact is that Westfield isn’t our competition; instead we have found that it complements our centre, encouraging more people than ever to have a look at what’s across the street.

Of course, it would be naïve to insist that some of our brands which are also represented in Westfield are unconcerned about their new neighbour, but in many cases it’s just not a worry.

One of the main reasons we believe Stratford is big enough for two shopping centres is because we target different shoppers with different needs.

Having done our market research before we purchased the Stratford Centre in 2010, we knew before Westfield opened its doors that we would not be rivalling for the same customer.

In our case, the shopper demographic was clear. Having been a part of Stratford for 35 years, the centre has cemented its role as the heart of the community, acting as a one-stop-shop for those who live in the area.

Many of those who work in the centre, particularly the market traders, are locals who have grown up in the East End with its iconic fruit and veg stalls and close-knit neighbourhoods. For these people, Westfield is an accessible tourist attraction, somewhere fun and impressive to visit.

However, spanning 1.9m sq ft, it does not necessarily lend itself to the bread and milk run.

That’s not to say we are not aware of the pull Westfield has – the scheme has been hailed a success by many already, and, with Christmas fast-approaching, it is unlikely its footfall figures will wane.

Unfortunately, this will not be welcomed by all and there are concerns for those schemes and retailers which are further east and outside the ‘Westfield Benefit Zone’. Urban centres in Ilford, Romford, Southend and Brentwood are likely to suffer as customers re-consider their shopping habits.

An example which illustrates this is the recently launched ‘Shop Romford’ campaign. It has been reported that Havering Council has launched the campaign to protect its town centre’s retail offering from the ‘threat’ Westfield poses.

With town centre vacancy rates continuing to rise in the face of a harsh market, there is no doubt that some will struggle with a new mega-mall just up the road. That said, campaigns like ‘Shop Romford’ are proof that the commitment to help town centres and nearby shopping centres flourish is still strong and that there is a desire to keep our community offering alive.

Of course, it is still too early to truly evaluate the ‘Westfield effect’.

A mere 10 weeks is simply not long enough to assess its impact on London’s East End, on Stratford, or on our shopping centre. We also must consider that the success we will reap from the Olympics will be temporary, as the attention on the area will last for a relatively short period.

Only once the biggest show on earth leaves town will we really be able to see the effects of Europe’s largest shopping centre.

 

Ilan Goldman is European director of Catalyst Capital

Advertisements

About Paul Norman's Olympics blog

News Editor of CoStar News, a commercial property news service. Regular blogger on the London 2012 Olympics and what it means for property and the the regeneration of East London
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s