Retailers want to invest in physical stores. The problem is increasingly finding the right space in which to do it. Recent research, reported by the Financial Times, points to a shortage of available retail warehouse floorspace across the UK after years of limited development. That ought to be a positive story for retail: demand is there, investment is there and customers still value well-located physical stores.

But there is a problem. Planning policy has barely moved.

The new NPPF puts economic growth, productivity and investment firmly back on the agenda. Yet retail is largely absent from that conversation, while the policies governing where and how new retail development should happen remain broadly unchanged.

The draft London Plan illustrates the tension particularly well. Policy PV3 rightly recognises that successful town centres need to evolve, with a mix of retail, leisure, employment, residential and community uses. All good stuff. But when it comes to retail parks and other modern retail formats, the emphasis remains on “optimising” existing sites and making more efficient use of land. The implication is difficult to miss: these are uses to be intensified or repurposed, rather than successful commercial locations capable of supporting investment in their own right. 

That feels increasingly at odds with what the market is telling us. 

Part of the challenge is that retail policy was shaped at a time when the principal concern was protecting town centres from the rapid growth of out-of-centre development. Today, the issues facing town centres are very different. The growth of online shopping, changing consumer behaviour and shifts accelerated by the pandemic have transformed many centres, with leisure, food and drink, independent businesses and community uses playing an increasingly important role. In that context, the debate should not simply be about retaining retail floorspace at all costs, but ensuring communities have access to the facilities they need in the right locations.

Rather than pitching retail investment against good placemaking, there is an opportunity to do both: creating modern retail space that meets customer demand while contributing to regeneration, sustainability and better places. 

For retailers, developers and investors, this tension creates opportunity. The next generation of retail development will need to demonstrate not only commercial demand, but how investment can support the wider objectives that planning policy increasingly expects development to deliver. 

Demand for retail floorspace is there. The question is whether planning policy is ready to make room for it. 

Iceni advises retailers, developers and investors on retail planning strategy, planning applications, Local Plan promotions and town centre regeneration. Our Retail and Town Centres team works across the UK to unlock development opportunities and secure planning permission for new investment. 

If you would like to discuss the revised NPPF, the draft London Plan or opportunities within the retail sector, please get in touch.