The face of retail is changing as stores adapt to several new challenges. And it’s starting to manifest itself in changes to the size of retail spaces. We take a closer look at how shops are altering their footprints and why.

The time when a town would have a large supermarket, a few medium-sized shops and restaurants, and a handful of small cafes are gone. With supermarkets opting for smaller ‘convenience’ stores and café chains expanding into larger units, the UK high street has changed rapidly in recent years.

Clothing, cafes and Click & Collect

London has recently seen a rise in popularity of A1 retail, like fashion boutiques, hairdressers and small sandwich stores.

Figures from the City of London Corporation show the total floor space of A1 retail units increased by 13% between 2008 and 2014. But the interesting change was in the average size of these stores. Over the period, they grew from 152 sq m (1,636 sq ft) to 204 sq m (2,195 sq ft) – a 34% increase.

One reason given for the growth is a shift of focus from sales to storage.

Some occupiers now require more back-of-house space for ‘Click and Collect’ storage, especially in clothing, electrical and household goods shops. This is driving demand for larger units - but consumers aren’t seeing this, as the storage aspect isn’t visible to them.

Coffee shops are also changing. While Starbucks recently announced one of its largest UK stores in Northampton – at a massive 2,500 sqft, and Costa let a store in Hereford at just under 3,000 sqft, they are also moving into the drive thru market.

With an improving economic picture, there are more new retail start-ups, who are taking the smaller units in town centres. Such new businesses are helping to reverse the 'clone town' tag some towns were labelled with in the boom years.

But while there has been a shift towards these types of shops and cafes, supermarkets are still investing in town centre premises, despite an unstable and changing market.

The supermarket dilemma: too much space

During the late 90s, supermarkets had a boom. In a bid to take over everything from groceries to clothing and homeware, they created huge out-of-town stores where you could buy anything under one roof. It reached its peak with stores measuring up to 100,000 sqft.

But since then, consumers have started to favour a ‘little and often’ approach to grocery shopping and these large stores have become white elephants, sapping resources and profits from the supermarkets.

To combat the problem of too much space, Tesco introduced coffee shops and gyms into the buildings.

But these were only short-term fixes to the problem. And with Goldman Sachs predicting an 18% drop in sales from larger stores by 2020, the trend away from large stores could grow.

Bigger and small stores

The move to ‘little and often’ has led to more convenience-style stores. And as super-large stores drop in size, smaller stores are actually getting bigger.

Waitrose’s ‘convenience’ models now range from 4,000 sq ft up to 13,000 sq ft, while M&S has stores ranging from 3,000 sq ft to 16,000 sq ft.

These larger convenience stores are still located in handy locations. While they might not be on high streets or near transport hubs, they’re taking over premises like old car showrooms on busy arterial routes or near town centres. They’re also targeting under-utilised commercial properties, such as poorly-performing offices.

At the other end of the scale, Sainsbury, Tesco, and Co-op are pushing the boundaries of size downwards. They are opening 1,500 sq ft stores in select locations, such as railway stations or other transport hubs, while M&S is essentially opening small sandwich stores at these hubs.

What does the future hold?

While there has been a general shift away from larger stores, the planning system is slow to react. Many developers still have projects in the pipeline for 40,000+ sq ft stores.

These developers are now rethinking their plans with moves to split them up into two stores – a high-end supermarket like M&S or Waitrose and a discount store like Lidl or Aldi.

Past examples of this clustering have succeeded, with shoppers buying staple goods from the discount stores and their luxury items from the high-end supermarkets.

In two years’ time, once the planning has gone through, you’ll start to see this much more often.