Supermarket giants lead high street retail renaissance

SUPERMARKET chains are driving a renaissance of the high street as they take advantage of cheap rents and a lack of competition to snap up prime town centre locations, an influential report will say this week.

Colliers International, which will publish its 2010 Midsummer Retail Survey on Wednesday, reports that big food chains such as Sainsbury's are increasing their presence in town and city centres by targeting smaller, compact convenience stores.

They are battling over potential locations in Scotland and are sustaining an otherwise suppressed commercial property sector, Colliers says.

Tom Johnston, head of retail at Colliers, told Scotland on Sunday: "Supermarkets have their fan clubs and their doubters as well but obviously everyone uses them. At the moment despite the maturity of that particular sector (of the retail market], there is still a race for space and a race for sites."

Colliers says high street landlords and commercial property developers are increasingly courting big supermarket chains as they sign long 20 to 25 year leases. Most other retailers will now only commit to a 10-year contract with a break clause after five years amid the ongoing economic uncertainty.

Convenience stores such as Sainsbury's Local and Tesco Express have proved so successful that other retailers such as B&Q and Halfords are also making a return to the high street. B&Q last week revealed that it is rolling out 60 compact stores in town centres.

But Colliers insists supermarkets are not abandoning large out-of-town retail parks.