The battle for independents Small retailers hit out at Grand Central bosses as they shut up shop
THE opening of Grand Central was meant to herald a new era for shopping in Birmingham – but the reality has been very different for some independent stores which signed up when the centre opened in September 2015.
Small shop owners claim “very high” rents, rates and service charges have crippled independent stores in the centre which sits atop New Street Station.
Jeff Bains was one such shop owner who was keen to ride the redevelopment bandwagon when he opened his shoe shop in Grand Central in 2015 – but just over a year on he was forced to close his branch.
Mr Bains said his store had failed to see much of the footfall promised by leasing agents tasked with attracting new occupiers to the then council-owned Grand Central.
And he is not alone – in total, five businesses which opened in Grand Central have now shut : Jeff Bains, Steel and Jelly, Newsflow, Francesco Ristorante, Joe Dulucci’s and Cocomacs. A further six units lie empty.
Mr Bains said he signed a ten-year rent deal costing him £120,000 for his outlet in summer 2015 after moving from cheaper premises in the Bullring.
But he claimed he and other independent retailers had failed to see the footfall predicted after signing rent, rates and service charge deals with the council’s leasing agent and contractors.
He said: “We had to pay for the shop fit-out in exchange for a 12-month rent free period, but the fit-out cost £120,000 – twice as much as we were initially told it would be.
“We were also told by the leasing agents that our position near the Ste- phenson Street ramp entrance would be the best location, as everyone would use that entrance.
“This was one of the reasons the agent said the rent could not be reduced. But nobody uses that entrance and businesses there are suffering as a result – apart from Holland & Barrett which doesn’t have to rely on footfall, as shoppers will actively seek it out.
“It was a surprise when I heard Steel and Jelly folded because at least they were in the main central area and got 100 per cent of the footfall compared to our 10 per cent. It just goes to show how difficult it is to survive.”
Mr Bains, who has four other shops in the Midlands, claimed the city council could have done more to help him and fellow independents.
He said: “They could have offered a smaller business a rent-free period as an incentive. And they were in a position to help us with lower business rates – but they offered nothing like that.
“I understand the job of the leasing agents was to try to fill up all the empty outlets before opening.
“But it’s hard enough to be a small business, never mind being tied into ridiculous contracts, when the foot- fall promised has blatantly not materialised. I was lucky that I was able to get out of my contract.”
Birmingham City Council bought the old Pallasades shopping centre above New Street Station in 2009 for £91 million.
Grand Central then cost around £150 million to develop and was later sold to Hammerson, which also owns the Bullring, for £335 million.
Earlier this week Hammerson announced a 56 per cent drop in profits to £322.8 million.
It has financial interests at retail centres around the UK, including Cabot Circus in Bristol and Brent Cross in London. The redeveloped New Street Station – the busiest train station outside of London – has an annual footfall of 55 million passengers a year.
But Mr Bains said: “We were told that this would be one of the best shopping centres in the UK, with the footfall to match thanks to the train station.
“But in reality hardly any of these train passengers go up the escalators to Grand Central. You don’t need to go through Grand Central to leave the station. The agent also said the John Lewis store would bring in shoppers from Solihull who would rather shop at Grand Central rather than Bullring.
“The only businesses that are surviving are the big brands and the restaurants in the main centre and walkway.”
The Post spoke to other small businesses including kiosk holders at Grand Central.
One business owner, who did not wish to be named, said: “It is a joke. We were told the footfall would be higher than the Bullring and the rent has to be higher because it is a brand new complex.
“But financially, being here is simply not worth it. ”
Hammerson which has owned Grand Central since January 2016 told the Post: “We don’t disclose individual centre footfall, but footfall at Grand Central is up year on year and continues to outperform the national benchmark.
“We are continually working to refresh our mix of shops and restaurants to ensure that shoppers can enjoy the very best retail, dining and leisure offer.”
Paul Dransfield, strategic director for Major Projects at Birmingham City Council, said: “All lettings agreed for Grand Central were negotiated with occupiers based on commercial rents for the type of shopping centre and footfall being offered.
“The shopping centre was almost fully let when it opened in September 2015 and there has been very little change in tenants since.
“Professional lettings advisers were used to conduct those negotiations.
“We are not able to discuss commercial matters but we will ask the new owners to contact the tenant and advise us if there are any issues we need to address.”
It’s hard enough to be a small business never mind being tied into ridiculous contracts, when the footfall promised has not materialised Retailer Jeff Bains