Pressure on retail landlords has never been greater. In 2019, over 16,000 stores closed, impacting 140,000 employees. The remaining retailers were achieving rent reductions of up to 30%, with shorter lease lengths and longer rent-free periods. The Covid-19 crisis only increased this pressure: by summer 2020 less than a third of retail rents were being paid on time.
As one of the largest retail space owners in the UK, Landsec saw its share price fall by almost 50% in 2 months. A new CEO, Mark Allan, committed to laying out a bold new strategy.
The business needed a new way to predict future retail performance and gain proprietary insight. These insights needed to be reliable and adaptable to volatile market conditions.
Arca Blanca’s solution was to build a bespoke Dynamic Strategy tool that forecasts retail rents, affordability for retailers and consumer confidence. These predictions are given across 300+ combinations of variables (geography, store type and retailer type) to allow detailed strategic planning.
The tool uses powerful data science techniques, applied to 200+ data series. It evolves as the market develops – setting it apart from prevalent ‘static’ industry forecasts – and users can model different economic “what if” scenarios in real-time.
Our unique approach meant the tool took 10 weeks to develop and has a mean absolute accuracy of >90%.
The tool is now an integrated part of Landsec’s strategy setting, delivering a sustainable competitive advantage. These insights are informing an ambitious new strategy to “Reimagine Retail”.
“We needed a bold new strategy that would give us a competitive edge in a fast-changing and challenging retail environment. I knew that Arca Blanca’s combined strategy and data science expertise would elevate and accelerate our thinking.
I was delighted at how quickly they worked with our Strategy Team to deliver a powerful bespoke decision-support tool that is unlike anything else in the industry. This has given us proprietary, data-led insights that have become a core part of our transformative strategy to reimagine the future of retail.”
— Mark Allan, CEO
“Landsec has an ambition to become a leading adopter of data science – gaining a competitive advantage by better adapting to a rapidly changing world for example by anticipating customer needs or market movements.
Arca Blanca is helping us to leap-frog traditional industry research and generate accurate insights, tailored to our needs, based on proprietary data. We now have a powerful bespoke tool at our fingertips that will allow us to develop strategic thinking faster, with a clear focus on what matters.”
— Nick de Mestre, Managing Director, Strategy, Research and Innovation
View the Arca Blanca profile in the MCA Members Directory.