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Korinne Le Page, Head of Retail Development for the Guernsey Retail Group, examines why new outlets are springing up in Guernsey and shows how the Channel Island should be considered as an attractive opportunity for UK brands and independents.

Businesses will always face challenges, none more so than over the past couple of years. Covid-19 is re-shaping and accelerating change in the retail sector, with new trends rapidly gaining speed across the industry, brought on by restrictions imposed at certain times and changing consumer habits. It is therefore encouraging that through entrepreneurship, creativity and community, one location in particular is seeing more than just the green shoots of recovery.

Guernsey, a self-governing Island of 63,000, is lively, relatively affluent and sophisticated. The retail sector’s history can be traced back almost 250 years and today, it is diverse and dynamic with St Peter Port, the Island’s capital and hub, offering a varied shopping experience for locals and visitors. Regular and popular events are put on throughout the year, increasing footfall and, as a tourist destination, around 100 cruise ships visit every spring and summer, bringing in over 100,000 new arrivals. Along with almost 300,000 independent visitors annually from around the world, this allows retailers to benefit from a larger customer base during the season.

One of the other key factors illustrating the Island’s attractiveness is its relative affluence. The Island’s GDP per capita in 2020 was £50,353, some 57% higher than in the UK and discretionary spend per household is just over £23,000 in the same year. Some of this prosperity can be attributed to Guernsey’s position as an international finance sector, which provides well paid and regular employment to a sizeable proportion of the local population, along with low unemployment.

In Guernsey, VAT is not applicable and the availability of items is good. The majority are obtainable locally and this includes higher value household items, clothing, jewellery and cars. As a standalone Island, consumers also cannot travel to other cities or shopping centres so easily as in the UK.

A further consideration is home ownership. The local government’s figures show that 60.8% of households are occupier owned so, as a result, there is a buoyant market for home and durable goods.

The Guernsey Retail Group (GRG) was established to support, represent and drive the local retail economy. It speaks for the sector, assisting businesses of all sizes, product offerings and ownership type. The GRG works with Guernsey’s government and has developed positive relations with commercial agents and other key stakeholders, helping retailers wherever they are on their journey.

An example of a successful initiative is the Retail Pathway, which sees the GRG, landlords and businesses work collaboratively to provide short and medium term rental opportunities for fledgling outlets, along with established, expanding retailers.

The GRG’s quarter two report for 2022 provides a comparison of retail occupancy rates between St Peter Port and town centres in the UK. This shows that the average 2022 vacancy rate in Guernsey was just 7.8% in the three months from April through June, a reduction from 13.5% of units counted in Q1 that still reflected the impact of the pandemic. In the UK, the national vacancy rate is also decreasing, but at a lower rate than in the Island. The most recently available statistics for the second half of 2021 show vacancies at 14.4%, down 0.1% compared with January to June of the same year.

This 5.7% improvement in occupancy on Island can be directly attributed to a higher number of new openings, assisted by the Retail Pathway initiative, along with expansions of existing businesses. As a result, St Peter Port features a range of established independent retailers and hospitality outlets intermingled with larger chains, giving a vibrant, appealing and unique feel to the town.

Recent examples include Pavers, the Yorkshire-based shoe company that took on Jones Bootmaker and a local store in 2018, which recently re-opened in the centre of St Peter Port. Other UK brands now established are Marks & Spencer, Mappin & Webb, Boots the Chemist, Next, Monsoon, White Stuff, Mountain Warehouse, Schuh, Fat Face, Quiz, Jo Jo Maman Bébé, Yours, Swarovski, The Body Shop, Hotel Chocolat, Specsavers (headquartered in Guernsey), Sports Direct, Holland & Barrett and others.

Terry Gardiner, Director Commercial Property at Savills Guernsey, confirmed: ‘It is positive to see that the Island is buzzing with opportunities in retail, for everything from large chains, small independent outlets or somewhere in between.

‘In addition to strong demand from entrepreneurial start-ups, Guernsey has always been of interest to national retailers given its captive audience and strong, economic position. There is no escaping that the industry has been under pressure during the pandemic but on the whole, we have seen a very responsible approach from landlords who have assisted their tenants during this difficult period.

Furthermore, it is positive to see that we are moving out of this difficult period, albeit there will always be headwinds to contend, but Guernsey will always be able to claim that it is a good location in which to consider doing business.’

Source
Local Data Company Retail and Leisure Trends Report 2021 https://rb.gy/5qe5vq
Guernsey Annual GVA and GDP Bulletin, 2020 https://www.gov.gg/CHttpHandler.ashx?id=147608&p=0
Carey Olsen report https://www.careyolsen.com/articles/lure-guernsey-high-street
Visit Guernsey trade media https://guernseytrademedia.com/media/1ylm5g2w/vg_2019_value_to_economy_infographic.pdf
Guernsey Household Expenditure Survey 2018-2019 Report https://www.gov.gg/CHttpHandler.ashx?id=133968&p=0
Guernsey Annual Residential Property Stock Bulletin https://www.gov.gg/CHttpHandler.ashx?id=151201&p=0 

This article was also published in The Retailer, our quarterly online magazine providing thought-leading insights from BRC experts and Associate Members.