Author: Melanie Marriott, 02 March 2017

FSP has a long history of assessing the level of rental risk retailers are under, having conducted sustainable rents analysis  for  some of the UK’s biggest retail property owners and investors,  including L&G, M&G, Aviva, Redefine and Sovereign Land

FSP uses sophisticated model accounts analysis to create P&Ls for the majority of national multiple retailers, and uses this as a base for assessing performance at unit level, providing a valuable insight into performance and profitability. This helps landlords to be proactive by highlighting struggling retailers and identifying units that are over/under-rented.

From April, UK retailers will experience major upheaval with the forthcoming changes to business rates and the 4.16% increase in the minimum wage. FSP’s insight into retailer performance has never been more relevant.

Requests for updated rental risk assessments have increased in recent months, the case study below details how FSP’s P&L assessments can assist landlords in understanding their occupiers’ performance.

Case Study


A retailer has reported struggling sales performance in one of our client’s Centres and is citing the forthcoming business rates increase as a reason for seeking a rent reduction.

How can FSP help?

  1. Estimate the occupier’s sales performance – If sales data is not available, FSP can estimate this. FSP collects a wealth of sales data from retailers across the UK (with over 500 individual retailers), in its online portal STAR .  Sales information is stored  securely and is protected by a strict confidentiality policy, turnover is never disclosed to third parties, however we do use this information, along with data  from previous projects and trade press articles, combined with our deep understanding of retail,  to inform sales estimates. Projections are guided by experience and we typically aim to be within 10% of an occupier’s actual turnover
  2. Assess the full unit costs – Including rent, rates, service charge and insurance (usually provided by the centre management or landlord)
  3. Understand and apply the retailer’s operating model – Different retailers have very different operating models. Pandora will have a very different target ROTA (Return on Trading Assets) to Poundland, for example
  4. Interpret and Advise – As well as applying the science to the numbers, FSP provides detailed recommendations for future action


Example P&L


The client was well informed ahead of the meeting with the retailer and was able to successfully rebut requests for a rent reduction, based on the relatively low (in monetary terms) impact rates and wage increases would have on this unit’s profitability.

If you would like to know more about retailer risk analysis and our P&L assessments, please contact Melanie on 01494 474740 or email

Post a comment

FSP View – Department Stores Diversification

This FSP View focuses on the ongoing efforts made by popular department stores to help keep themselves relevant in today's market and futureproof their business model

Continue Reading

FSP View - Looking to the future

Following the news that over a quarter of the UK’s largest retailers are loss-making, FSP consultant Harri Jaaskelainen explains how we can help you understand risks and maximise returns with a forward looking view, before things get bad.

Continue Reading

Not all doom and gloom in the F&B market

Following the shocking start to 2018 in the F&B market, FSP consultant Jo Biddle takes a look at the newcomers and growers in the sector, and what they are doing differently to attract customers.

Continue Reading