Tuesday 16 February 2010 | UK recession: the Telegraph tour feed


UK recession tour: Liverpool's retail therapy pays off

The opening of Liverpool One, a large shopping centre, has helped to tackle recession head on, with 18pc more shoppers attracted to the city in the past year, says James Hall


'That's a good wee independent shop there. Facial Attractions," says Ian MacGillivray, centre manager of the St Johns shopping centre in the heart of Liverpool.

St Johns was built in 1969, is aimed at low-spending customers and has 60pc of its space taken up by independent shops you've never heard of. Many have puns in their name.

By rights the centre should be suffering. Not only does it look its age, but it has had to compete with last year's opening of Liverpool One , a 42-acre behemoth of a shopping centre that occupies most of Liverpool city centre.

On top of this the consumer economy has taken a hit over the last year. UK-wide high street like-for-like sales fell in May by 0.8pc against 2008. The retail sector has seen many of its famous names collapse. In the last year the St Johns centre alone has lost a large Woolworths, a Mk 1 and its post office, which has been transferred to a branch of WH Smith outside the centre. There are 10 empty units in the centre, more than double last year's number.

But despite the deepest slowdown in decades, St Johns is holding its own. The average spend per visit per customer has risen to £27.05 from £24.96 last year, and Mr MacGillivray says that many of the empty units are on the verge of being filled. Further, 74pc of the centre's 13.5m annual customers have not changed their shopping habits.

"Woolworths is missed by our customers but you can't lose a name of that status without some effects. Our existing tenants have done a great job at filling the gap," he explains.

"We are not feeling that the downturn is going to have a permanent effect," he says.

In fact, most of Liverpool's retail and leisure businesses are proving to be remarkably resilient. Although unemployment in Liverpool has risen from 5.7pc in December 2007 to 7.8pc today, shoppers are still spending. Liverpool's retail economy appears to be in something of a bubble.

One of the city's most famous clothes shops is Cricket , a high-end fashion boutique close to the famous Cavern Club that has become a favourite of Wags such as Coleen Rooney, wife of locally born football legend Wayne. The embodiment of Wag culture, Cricket is a perfect barometer of the spending habits of Liverpool's wealthy residents.

Justine Mills, who opened the store 16 years ago, says shoppers are not spending less, but one difference is that customers are buying more austere fashions so as not to appear overly "bling" in a time of recession.

"We have seen a shift in some of the purchases that people are making. Even if people are not less well-off, there is a note of caution in what they are buying. They don't want to be seen as flash. Some of the girls, instead of coming in once a week they will come in two times a season," she says.

Customers are also buying more "classic" lines, rather than fly-by-night fashions, as they look to get more value from a garment.

And what of Mrs Rooney, Liverpool's ultimate consumer? Is she still shopping? Ms Mills reluctantly admits that she was in Cricket just the day before The Daily Telegraph's visit, but says no more.

Over at Liverpool One, estates director Chris Bliss explains that opening at the start of a bruising recession has not been the disaster that many expected. When the first phase of Liverpool One opened on May 29 last year it had 39 stores trading. It now has 122 and is 98.5pc let. Some big brands are due to open shops there soon, including Everton football club, whose store will cheekily be called Everton Two (as opposed to Liverpool One).

The recession has claimed just one retailer from Liverpool One – fashion chain Principles – and although other chains are in administration, they are still open for business.

"In terms of the local economy, one might say 'what credit crisis?' " says Mr Bliss.

Due to the centre opening, Liverpool has seen 18pc more shoppers over the last year, compared with a 3.5pc-5pc decline across the UK.

This is no surprise as Liverpool One has catapulted the city to 5th biggest retail city in the UK, up from 15th last year.

The centre has dragged the city's other retailers up with it, rather than caused them to close down.

"We have not had retailers move to Liverpool One," says St Johns' Mr MacGillivray. Indeed, he says that the rival shopping centre has been a force for good for Liverpool.

"Liverpool needed saving. It had dropped so far down the retail rankings and was missing so many names that people outside the immediate catchment were not coming to shop here. Really wealthy people were going to Manchester when they should have come here," he says. Far from feeling the pinch, St Johns has recently received planning permission for a £100m refurbishment. Work is due to start in 2012.

Warren Bradley, leader of Liverpool City Council, says he is confident about the outlook. "The experience of being European City of Culture (in 2008) has reshaped Liverpool's ambition and expectations. The city is brimming with confidence in all areas from business and retail to tourism and culture, and Liverpool One has played a major part in that renaissance."

Jack Stopforth, chief executive of the local chamber of commerce, says that the new centre has "paid dividends" and contributed to the city's resilience to the recession.

Of course, it will take another year to see how Liverpool One's true "like-for-like" sales have done. But its first year appears to have been a success.

Liverpool One aside, there is another reason why the city is keeping its head above water, according to Cricket's Ms Mills. There is not a huge savings culture in Liverpool – if people have money, they will spend it.

"In Liverpool people are more prepared for the bumps. Also, we live for the moment in this city. We are not second homes-type people. If people have spare cash, they will spend it," she says.

Sudarghara Dusanj watched every day of last summer's Olympics in Beijing. He didn't have much choice – on July 7, the day before the Games begun, the company that he owned with his brother went into administration and he was sent home.

Cains Brewery was suffering from declining sales. The brewer and pub owner collapsed when Bank of Scotland, its bank, "got nervous" and withdrew funding from the Liverpool institution. "It was a real kick in the belly," says Mr Dusanj. Local reports estimated that Cains owed £50m to various creditors when it failed, including £6m of unpaid beer duty.

"That first day was a difficult, difficult thing, particularly that first night," says Mr Dusanj.

"The Olympics started the next day on 08. 08. 08. I'll never forget that. I watched most of it," he says. But his enforced bout of TV watching proved cathartic."I listened to all these stories about sportsmen who get big knock-backs but they believe in what they have and come back," he explains.

He and has brother Ajmail decided to give things another go and bought much of Cains from Pricewaterhouse- Coopers, its administrator, later in the summer.

Today the group is smaller and humbler than it was. It has just nine pubs and fewer staff. A number of old customers are gone, but many have stood by the company and there are new ones too. Turnover this year should be £30m, just over half of what it was but still a sizeable amount.

The size of the company is not the only thing that has changed. Mr Dusanj appears different to the confident, ebullient beer-maker he was last year. He is softer-spoken and meeker. He says he was "gutted" by what happened. But he says the "unbelievable" events of last year are behind Cains and it is onwards and upwards from here.

 Tomorrow James Hall returns to Cardiff to see how the property sector is faring one year on

Recession tour of Britain

Comments: 7

  • I'm still waiting for the 20,000 jobs we were promised for Capital of Culture...

    Wang Bukake
    on June 16, 2009
    at 09:09 PM
  • The ironic thing is many of the most cynical about this retail expansion are us Scousers who've seen it all before. We get a new retail development (i.e. Cavern Walks, the Albert Dock, Clayton square), everything is great for a year during the hype phase then trade slows down and we're back to square one with no overall economic boost as smaller shops go out of business. True, Liverpool One is much bigger than past efforts but what we'll probably observe are the stores in surrounding areas die a slow drawn-out death. Then perhaps the leaders will realise shops and wags aren't the only things in a city of half a million people...

    Armand Frisbee
    on June 16, 2009
    at 07:05 PM
  • Puns in St John's? The best in the Liverpool One mall is Everton FC's second shop (the first is at the stadium).
    Everton 2 Liverpool 1.

    Ed Moran
    on June 16, 2009
    at 07:04 PM
  • I'm amused that every article on Liverpool has the obligatory puff piece about Cricket, along with references to Wags. You'd assume from reading every teenage girl is out spending thousands on handbags in the hope of becoming a footballer's significant other. Alas, the reality is somewhat different. Give it a year or so and once people have spent their redundancy money & the banks call in the credit card debt we'll see how successful it all is.

    Ed Daduk
    on June 16, 2009
    at 07:03 PM
  • very poor superficial typical stereotype reporting.Based on what??

    philip hammond
    on June 16, 2009
    at 10:01 AM
  • I went to Liverpool One in March, my first visit back to Liverpool for many years. To my friend I said "Credit crunch - what Credit crunch?" Liverpool One is fantastic, the whole concept. Liverpool was buzzing and the visit made me feel great about this wonderful City.

    Peter Devine
    on June 16, 2009
    at 07:13 AM
  • I went to Liverpool One in March, my first visit back to Liverpool for many years. To my friend I said "Credit crunch - what Credit crunch?" Liverpool One is fantastic, the whole concept. Liverpool was buzzing and the visit made me feel great about this wonderful City.

    on June 16, 2009
    at 07:05 AM