Retail

East Midlands retail property shows strategic strength in 2025

By Alicia Lewis, Surveyor, NG Chartered Surveyors

The East Midlands retail property market in 2025 has been shaped by resilience, strategic adjustment and a continued shift in how retailers and investors approach physical space. While long-term structural change is still influencing decision-making, several clear trends have defined performance across high streets, shopping centres and retail parks.

Retail parks remain the strongest performers across the region. Consistent footfall, convenience-led shopping patterns and the dominance of essential and value-focused operators have made these assets the most reliable retail format. Investors continue to favour retail parks for their stable income profiles and dependable levels of consumer spending, further widening the performance gap between out-of-town schemes and more traditional retail destinations.

High streets present a more varied picture. Well-positioned centres supported by independent occupiers and strong community engagement have shown impressive resilience and, in many cases, outperformed expectations. Secondary high streets continue to face stagnant vacancy rates, reflecting challenges around changing footfall patterns, competition from other retail formats and the ongoing influence of hybrid working on weekday activity.

Shopping centres have reached a point of relative stability. Leasing metrics have improved and sentiment is more positive than in previous years. Landlords are focusing on curating a broader mix of occupiers, particularly experiential and service-led operators, in order to maintain relevance. However, economic pressures and the continued strength of online retail are affecting the pace of recovery and shaping longer-term strategies for these assets.

Consumer behaviour has been a pivotal driver of activity throughout 2025. Households remain highly value-driven, with demand centred on essentials, discounts, convenience and leisure. This has supported expansion from discounters, grocery chains, beauty operators and leisure brands, while mid-market and discretionary retailers remain cautious. Hybrid working has altered the rhythm of footfall. Weekends and local or suburban centres are busier than before the pandemic, while weekday city-centre footfall remains subdued. As a result, retailers are prioritising fewer but higher-performing locations and favouring greater flexibility in lease terms.

Momentum behind repurposing underperforming retail space has continued to build. Local authorities and developers are increasingly aligned in delivering alternative uses where underlying demand is strong. Mixed-use schemes, residential conversions, flexible office provision, gyms and leisure-led developments are becoming more common, reflecting a more innovative approach to repositioning redundant units and reshaping local centres.

Looking ahead to 2026, the East Midlands retail property market is likely to experience steady but targeted growth. Investment will continue to focus on strong retail parks. Repurposing and diversification will remain central to the evolution of high streets and shopping centres, with smaller and more efficient store formats becoming increasingly prevalent. The 2025 Labour Budget provides some relief for small retailers through reduced business rates, although rising wages and ongoing cost-of-living pressures mean consumer spending is unlikely to fully rebound in the short term.

Despite these challenges, the market remains active and adaptable. Strong demand from essential and value-led operators, combined with increasingly creative redevelopment strategies, will continue to support activity across the region. The East Midlands retail landscape is set to keep evolving in 2026, offering meaningful opportunities for organisations prepared to respond to shifting patterns in consumer behaviour and retail operations.

To discuss your retail property requirements, calls Alicia on 07517 905795 or email alicia@ng-cs.com