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Shopping centre owners are called to action over service charges

Published:  17 April, 2009

Shopping centre service charges across the UK could be cut as a result of a new ten point plan, unveiled by a consortium of landlords and retailers.

The plan follows trials that saw a 20 per cent saving at British Land’s Meadowhall, Sheffield; a 13.1 per cent saving at Land Securities’ White Rose Centre in Leeds; an 11 per cent saving at PruPIM’s Mall at Cribbs Causeway and a 10.2 per cent saving at Westfield’s Merry Hill in Dudley.

Speaking on behalf of the landlords, Land Securities’ head of retail Richard Akers said: “We all know the retail market is difficult and as major landlords it is a win-win situation if we can help to strengthen the position of our retailers. The ten point plan has been created so that it can be applied in almost any shopping centre to help identify potential savings.”

The plan calls on owners and managers to discuss with a representative group of retailers what level of service they require in the current economic climate and to identify economies of scale from sharing service providers. This could lead to shorter opening hours for centres if it is thought this could lead to lower running costs, and to a reduction in customer service activities.

Managers will also be required to look at ways of reducing the frequency of cleaning and landscaping, and to encourage multitasking by security staff with customer service and cleaning duties.

Administration, procurement and purchasing also come under the spotlight and managers are encouraged to re-negotiate or re-tender existing contracts to take advantage of current market conditions.

Marketing is also identified as an area where savings could be made. Malls are encouraged to concentrate on the most cost effective media, especially PR and digital activity, and to “undertake campaigns that deliver obvious returns on investment through data capture and voucher redemption.”

And capital expenditure is not immune: the plan calls on operators to “review the specification and frequency of maintenance carried out on non essential equipment and consider whether expenditure on major projects can be delayed, but whilst ensuring health and safety and statutory compliance are not compromised.”

Energy costs will be closely scrutinised and the code calls for owners to consider converting enclosed malls to natural ventilation.

The proposals have been welcomed by the BCSC which promised to move quickly to encourage its members to adopt the recommendations.