South Ribble Ikea site: What now?
Bosses behind the Lancashire Central site face a daunting task to find a replacement anchor firm after Ikea's shock withdrawal, experts have said.
The Swedish furniture giant - that has been attached as the flagship business for the development from an early stage - announced a U-turn on Friday.
It is the second major blow for South Ribble in the space of a week after Tesco announced it is pulling out of establishing a 24-hour superstore in Penwortham.
Council bosses have remained bullish about their prospects in ploughing ahead with retail plans for the site, which is close to the M6/M65 junction.
But Dr Robin Carey, marketing and planning director at the University of Central Lancashire, said without Ikea as its “unique selling point”, Lancashire Central (formerly known as the Cuerden Strategic Site) will struggle to stand out among a sea of similar local retail parks.
And Geraint Johnes, professor of economics at Lancaster University, has suggested bosses could focus on attracting a distribution centre operation - rather than a vast retail offering - because of changing shopping habits.
Speaking to the Lancashire Post, Dr Carey said Ikea’s withdrawal will without doubt be a “big loss.”
He said: “We were looking at about 4,500 jobs in the area. The problem is this isn’t the only big retail setback the region has had.
“I give my full backing to the council to find someone else but I think (the current retail sector challenges) are going to make it very difficult.
“We’ve already got a number of retails parks in the area, I can look out of my window and see two or three depending on what way I’m facing.”
Given that Ikea does not have a presence in Lancashire, the site had something that was guaranteed to bring in shoppers, Dr Carey said.
He added: “This development had a clear point of difference (with Ikea), without it, it could become a “me too” site.
“Retailers could look at it and think they’re going to go to one elsewhere, one that’s already established, in Preston or Blackpool, for example.
“With a huge successful development, it needs something that offers that clear point of difference, a unique selling point (USP). If it has that it has a real chance.
“For example, the Trafford Centre had Selfridges, that was its point of difference.
“And Cheshire Oaks has all those brand outlets at significantly less that the high street, that was its USP.
“The dilemma (for those behind the delivery of Lancashire Central) is that they’ve got to try and find at the 11th hour an anchor for the site, that has a unique point of difference (like Ikea) and the answer is there’s hardly any of them.”
Prof Johnes said Ikea’s decision was indicative of a challenging environment that currently exists in the retail sector.
He told the Post: “This is a challenging time with more than 20,000 jobs being lost in the first few months of the year. This is partly the result of a shift towards online shopping.
“New developments such as Cuerden have been further hit by increased costs in the construction sector, where average wages have accelerated sharply in recent months.
“Ikea itself has already been experimenting with new store formats, including city-centre collection points and smaller retailing units, and it may well be that it now favours this type of presence in Lancashire.
“As more retail moves online, large distribution centres are springing up – like the warehouses Amazon have in Doncaster, Swansea, and some other places.
“These generate employment opportunities, but they are very different in nature from the traditional retail park.
“Indeed, to take an optimistic view, the future of retail may be one that allows the Cuerden site to generate employment without the traffic problems that have been envisaged.”
Richard Rands, Ikea UK and Ireland Property Manager, commented: “After careful consideration, Ikea UK and Ireland has decided not to progress with the planned development of an Ikea store at Cuerden Strategic Site, near Preston.
“Our decision is due to increased development costs and delays outside of Ikea’s control which no longer make this location viable.
“We will continue to look for new sites and opportunities in this area as part of our commitment to expansion in the UK. At Ikea, we want to be more accessible, bringing our unique home furniture expertise and product range closer to more customers, and we look forward to exploring new opportunities.”
Babs Murphy, chief executive of the North & Western Lancashire Chamber of Commerce said: “For South Ribble to miss out on such a major store locating within the new development is disappointing.
“However South Ribble has considerable advantages, a quality environment, world class businesses and excellent transport links by road and rail.
“Of course it’s a setback but it’s a strategically important site which has significant potential and will be extremely attractive other major stores and investors.”
John Jones from campaign group Limit Cuerden said: “The news of Ikea pulling out of the Cureden development is a relief for the thousands of South Ribble residents living near the site.
“Their lives would have been ruined by a huge increase in traffic on a road network ill prepared for a development of this scale.
“The mitigating highways improvement measures that were proposed would have done little to stem the daily gridlock we already experience in Lostock Hall and Bamber Bridge.
“What is a tragedy is that hundreds of trees have already been cleared from the site leaving a terrible blot on the landscape at the end of the M65. We would be interested to know how this will be made good in the interim.
“The news that hundreds of jobs will not now be created and the wider scheme is in jeopardy is less welcome.
“Limit Cuerden has been realistic in the knowledge that this site was always going to be developed. It’s been earmarked for over 20 years. We wanted it done in a way that respected the local communities surrounding it. “We sincerely hope that whatever is next for this land, that residents will be properly consulted and appropriate traffic measures to cope with the demand will be included.”
South Ribble Council leader Mary Green said: “We have been advised that IKEA are considering the future of their new store ear-marked for South Ribble.
“The land at Cuerden, where it is set to be based, is one of our key strategic sites that will help create thousands of new jobs for residents and really boost our local economy.
“While I would strongly urge IKEA to continue with their plans for the site, there remains a really strong demand for commercial space in South Ribble, given the excellent links to the motorway networks.
“We will be working incredibly hard with Lancashire County Council and our partners in order to continue to bring the Cuerden site forward.”
Preston City Council deputy leader Peter Moss said: “We are disappointed to hear of Ikea’s decision to withdraw from the Cuerden site.
“However the site continues to be one of significant potential for Central Lancashire, both in terms of location and scale. It remains our hope and intention that this development site will provide a range of job opportunities to Preston residents.
“We will continue to work with our City Deal partners to achieve the best possible outcome for the area. We are committed to our ambitious aspirations for Preston and Central Lancashire.”
Lancashire County Council leader Geoff Driver said: “IKEA have notified us that they wish to withdraw their plans for a new store at the Cuerden development site. This is extremely disappointing and we will hold discussions over the next few weeks with IKEA, the main anchor occupier for the retail element of the strategic development site at Cuerden.
“All parties agreed to the timescales more than a year ago and we have been working together consistently to meet all deadlines.
“We appreciate that there is a current state of uncertainty in the UK retail market generally, and we know there have been rising costs.
“However, this still remains a great investment opportunity. The site is in a very sought after location, right on the motorway network with planning consent already granted. Lancashire County Council will continue to work hard with their partners, the Eric Wright Group and Brookhouse, to ensure they reach the best possible outcome for Lancashire.”
The Ikea '‹withdrawal is a major blow to one of the North West's top construction, civil engineering, property development and facilities management companies.
Founded in 1923, the Eric Wright Group has several divisions and is involved in several major projects across the country.
It has not put all its eggs in one basket - but the Cuerden project is a setback.
Bamber Bridge-based Eric Wright Group is also working on the Â£16m Market Walk project in Chorley, which has also suffered problems when Marks and Spencer said it was pulling out. But it is now believed to be reconsidering its decision.
In February, the Group agreed a refinancing deal with RBS with an increased funding package of Â£35m to help support its pipeline of projects across the North West.
The company did not want to comment today on the Cuerden situation.
Sir Mark Hendrick, MP for Preston, said: "I'm pretty angry about this. This is a major blow not just to South Ribble but Preston and the whole area.
"What does it say about companies' confidence in investing in the area over the coming years?"