CRE Corner Podcast Ep1 – The shape of retail
Stephen Springham, Partner, Head of UK Markets, Head of Retail Research, Knight Frank
Retail faces two significant challenges: sustainability and crime. Addressing these issues is essential, not only for the sector’s reputation but also for its long-term viability. As Stephen Springham noted, “Retail has more to think about, more to worry about,” but progress is being made.
Retail lags behind other commercial sectors in sustainability. Alarmingly, “4.5% of all retail stock in the UK is unlettable under MEES regulations,” Stephen pointed out, adding that this figure could rise dramatically in the coming years.
The disconnect between landlords and tenants is a major barrier. Both parties need to collaborate to improve sustainability across retail assets.
“…the reality is the bandings aren’t going to move quite as quickly as proposed, but that said, it still highlights a real problem. And I think the underlying problem is not just the numbers, really, I think it’s the mindset, whereby sort of the operators think it’s a landlord’s problem.”
While much of the conversation around ESG (Environmental, Social, and Governance) in retail focuses on environmental targets, Stephen Springham highlighted the critical role that the “S”—social impact—plays within the sector. He pointed out that retail is “the second-largest employer in the UK,” with approximately 30% of the nation’s jobs tied to the industry. This makes retail not just a commercial entity but a fundamental pillar of community life.
Beyond employment, the social contributions of retail extend to initiatives such as supporting local charities, hosting community events, and promoting inclusivity through accessible design and hiring practices. For many retailers, integrating these aspects into their ESG strategies offers a way to strengthen ties with their communities while contributing to broader societal goals.
However, Stephen cautioned that the sector often overlooks the social dimension in favour of environmental concerns.
“There’s an overriding tendency to focus on the E, whereas the S is possibly where retail can make a more positive contribution,”
For instance, ensuring fair wages, fostering inclusive workplaces, and prioritising local hiring can make a tangible difference in people’s lives.
Retail crime in the UK has become a growing concern, with shoplifting and other forms of theft reaching unprecedented levels. Stephen Springham likened the issue to a “virus,” noting that it has spread rapidly and become more blatant in recent years. He shared sobering examples of the financial toll this problem is taking on retailers, including a major high street brand that reported losing £16 million to shoplifting in London alone in just one year.
One of the major frustrations for retailers is the lack of effective deterrents. Current legislation and enforcement often fall short of addressing the issue. Stephen pointed out that in many cases, shoplifters stealing goods worth under £200 face little to no consequences.
“Until the law changes, there’s not much retailers can do,”
he observed, highlighting the limitations of the existing legal framework.
Ultimately, retail crime is not an issue that retailers can tackle alone. It requires a united effort from all stakeholders, backed by legislative reforms that ensure perpetrators face real consequences. As Stephen summarised;
“It’s an absolute virus, and we need to start treating it like one—by addressing the root causes and implementing robust defences.”
The challenges facing the retail sector are complex, but they also present opportunities for innovation and collaboration. Addressing sustainability and retail crime requires a multi-faceted approach that involves all stakeholders, from retailers and landlords to policymakers and industry bodies.
The retail sector’s ability to influence policy and drive change will be critical in shaping its future. Industry bodies like the British Retail Consortium must amplify their efforts to advocate for stronger laws, better enforcement against retail crime, and incentives for sustainability initiatives. By presenting a united front, the industry can secure the support it needs to address systemic issues.
As Stephen highlighted;
“Retail is not in terminal decline—it’s evolving.”
See also
FAQ
Retail sustainability refers to eco-friendly practices that reduce environmental impact while maintaining profitability. This includes energy efficiency, waste reduction, ethical sourcing, and digital transformation. Consumers increasingly favor green brands, making sustainability essential for long-term success. Kinexio helps retailers drive sustainability by digitalizing operations, reducing paper-based communications, and optimizing resource-sharing within retail environments, creating more efficient and eco-conscious management processes.
Retailers can cut emissions by adopting renewable energy, minimizing waste, optimizing logistics, and switching to digital communication. Kinexio reduces reliance on printed materials by enabling instant, paperless tenant communications, document sharing, and sustainability reporting. The platform also facilitates real-time energy usage tracking, helping landlords and tenants work together to lower carbon footprints. By digitizing tenant engagement and operational processes, Kinexio supports a more sustainable retail ecosystem.
Consumers prefer brands that align with their values, with Gen Z and millennials prioritizing sustainability. Transparent supply chains, eco-friendly products, and green initiatives build trust and drive loyalty. Kinexio helps retailers communicate their sustainability efforts directly with tenants, employees, and customers via real-time updates, sustainability-focused events, and engagement campaigns. This transparency fosters stronger relationships and encourages participation in green initiatives.
