High stall rent in Bluewater
Discussion
I was looking at a rent rate card from Bluewater for the cost of hiring one of those stalls/spaces in the middle of Bluewater walkways (either on the top of bottom level). I know its pretty much the pinnacle of UK malls, but I wasn't expecting the cost. The cost for a stall scales up from £4k per month in January to £11k per month in December (plus electricity, rates, license etc). How on earth do people make any profit in the later months? Surely those candy stalls or the helium balloons don't sell sufficient stock to make £11k in a month, and that doesn't allow for costs and expenses of operating.
I used to own something similar in a medium sized town shopping centre about 15 years ago. Rent was about 1.5k per month back then, so probably closer to 3k now.
You need a high profit margin to operate a business like that, something that costs pence to produce but sells for pounds. Ours was food related, and we were marking up close to 900%. We had a turn over of around 1-2k per week.
It was just about enough to pay the rent and bills, a small wage for my wife full time + a few part time jobs for students. Once you factor in that running a business is not 9-5 it was hardly worth it!
You need a high profit margin to operate a business like that, something that costs pence to produce but sells for pounds. Ours was food related, and we were marking up close to 900%. We had a turn over of around 1-2k per week.
It was just about enough to pay the rent and bills, a small wage for my wife full time + a few part time jobs for students. Once you factor in that running a business is not 9-5 it was hardly worth it!
Edited by 98elise on Sunday 11th January 23:38
I've been managing a mid-mall kiosk in Bluewater for the past two years - we've been there for three. We will be closing at the end of January. The high rent is one of the reasons (there are others but that's an aside). It is a premium centre but there's no doubt the rent is too high for the smaller retailers.
We pay a fixed monthly rate, not a scalable rate as you mention, but the figures work out the same, all in it's about £7k per month for the 6x2.5m space once rates and other costs are included. In busy months we turn over decent numbers and with a product range which works well as gifts we do well for Christmas and some other periods, having turned over 90k in December in 2013 (considerably less this year though), but at quieter times there wiil be days when we only take around £100 and that's scary.
A lot of the small mid-mall units in there are struggling and I know we are not the only ones who won't be there much longer. Come and see me for a chat if you want to, we are near John Lewis and directly between Reiss and Geox. We sell art reproductions, limited editions (including some great motorsport art) and do canvas printing on site.
Despite what Bluewater will tell you, footfall has seemed to be well down in 2014 and we've been around 20% down on sales month on month compared to last year.
Having said that, the right product, marketed and promoted well can work. Impulse buyers are where the mid-mall scores and if it's unique there's good money to be made but if you are competing with someone else within the centre it will be a price war which you don't need as you'll need to make as much as you can on pretty much every sale.
If you can supplement what you do in Bluewater with web sales, build good customer relationships and run it like a 'proper' business and not a glorified market stall it can be great but the hours and staffing can make for a very difficult business model. Good and reliable staff are vital but you will likely be offering minimum wage to college students or those just out of school so recruit carefully and expect to be on call every day to cover absenteeism. I've had a great team of just four staff but this has still been an issue on occasion - 18 year olds aren't always the most reliable emplyees and Bluewater don't like it if you fail to open on time. Look after your good staff!
It can work, and you won't get the same number of potential customers pretty much anywhere else, but converting them to real customers is hard work. That's the fun of business, of course, but you are right to be worried about the rent overhead.
We pay a fixed monthly rate, not a scalable rate as you mention, but the figures work out the same, all in it's about £7k per month for the 6x2.5m space once rates and other costs are included. In busy months we turn over decent numbers and with a product range which works well as gifts we do well for Christmas and some other periods, having turned over 90k in December in 2013 (considerably less this year though), but at quieter times there wiil be days when we only take around £100 and that's scary.
A lot of the small mid-mall units in there are struggling and I know we are not the only ones who won't be there much longer. Come and see me for a chat if you want to, we are near John Lewis and directly between Reiss and Geox. We sell art reproductions, limited editions (including some great motorsport art) and do canvas printing on site.
Despite what Bluewater will tell you, footfall has seemed to be well down in 2014 and we've been around 20% down on sales month on month compared to last year.
Having said that, the right product, marketed and promoted well can work. Impulse buyers are where the mid-mall scores and if it's unique there's good money to be made but if you are competing with someone else within the centre it will be a price war which you don't need as you'll need to make as much as you can on pretty much every sale.
If you can supplement what you do in Bluewater with web sales, build good customer relationships and run it like a 'proper' business and not a glorified market stall it can be great but the hours and staffing can make for a very difficult business model. Good and reliable staff are vital but you will likely be offering minimum wage to college students or those just out of school so recruit carefully and expect to be on call every day to cover absenteeism. I've had a great team of just four staff but this has still been an issue on occasion - 18 year olds aren't always the most reliable emplyees and Bluewater don't like it if you fail to open on time. Look after your good staff!
It can work, and you won't get the same number of potential customers pretty much anywhere else, but converting them to real customers is hard work. That's the fun of business, of course, but you are right to be worried about the rent overhead.
Edited by TwilightJohnny on Sunday 11th January 22:55
Another thing, choose your site carefully. Some spots are relatively quiet (the corner near the entrance to House of Fraser for example) and some are very busy but it depends who your target market is. If you are close to the fast food outlets you'll get different traffic from being in the quieter spots but fewer people isn't always a bad thing. If you are not offering a product to teenagers don't position yourself outside the fast food area would be my advise, it can be a horrible place to be.
I'd hate to be closer to the fast food outlets but if that's your target market then you will need to be. Some shoppers never go near the areas of Bluewater which don't cater for their tastes.
Oh, and I hope you don't mind the sound of screaming and crying children all day long, you'll need to learn how to filter that out!
I'd hate to be closer to the fast food outlets but if that's your target market then you will need to be. Some shoppers never go near the areas of Bluewater which don't cater for their tastes.
Oh, and I hope you don't mind the sound of screaming and crying children all day long, you'll need to learn how to filter that out!
Edited by TwilightJohnny on Monday 12th January 00:25
Gassing Station | Business | Top of Page | What's New | My Stuff