The Best Cities to Open a Brick-and-Mortar Shop in the UK

Small Business Tips

Trolley In Front Of Brick And Mortar Shop

Alex Miles 17 July 2024 minute read

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In today's world, where in-person shopping offers consumers a unique and personable experience, many UK retail businesses are changing from online-only to opening physical stores or expanding to new locations. However, this exciting move comes with its own set of challenges.

You’ll need to think about competition, potential for growth and how you’re going to fund your new store. But one of the most important things to consider is where you decide to set up shop. In an extremely busy and competitive landscape, finding the right location to open your store is key to driving business success.

With this in mind, we’ve pulled together a list of 30 of the most populated UK cities, researching which of these are the best for opening physical stores. We looked at metrics like the average cost of a rental space, average cost of internet and mobile plans, and the workforce unemployment rate in each area.

Alex Miles, COO at Capital on Tap has also provided five expert tips on what to consider when setting up a brick-and-mortar store.

The best locations to open a brick-and-mortar store

Choosing the right location for a store involves more than just calculating costs. While expenses like maintenance, internet, and rent or purchase prices are vital, factors such as customer convenience and local workforce availability also play a role. By considering the average cost for all these factors, our research revealed which cities in the UK are the best for setting up a brick-and-mortar shop:

Rank	City	Cost of a handyman	Cost of a monthly mobile plan	Cost of monthly internet	No. of parking spaces in the area	Monthly cost per sq ft to rent a retail space	Price per sq ft to buy a retail space	Workforce unemployment rate (%)
1	Nottingham	£24.00	£11.50	£28.00	11,654	£1.10	£105.64	6.5
2	Cardiff	£24.00	£11.11	£27.78	13,610	£1.00	£178.10	5.0
3	Coventry	£28.00	£11.50	£28.00	9,198	£0.88	£58.87	5.8
4	Plymouth	n/a	£11.25	£26.60	7,962	£0.76	£19.90	3.4
5	Leicester	£18.00	£13.22	£30.00	10,543	£1.49	£243.90	6.7
6	Southampton	£30.00	£11.25	£28.23	12,907	£0.68	£168.21	4.5
7	Leeds	£26.00	£12.33	£30.00	15,624	£1.33	£103.66	4.1
8	Wolverhampton	£30.00	£12.00	£28.62	9,362	£0.77	£132.48	6.2
9	Glasgow	£29.00	£13.16	£31.56	18,042	£1.48	£126.34	5.1
10	Newport	£24.00	£12.00	£27.78	5,777	£0.82	£32.93	4.1

1. Nottingham

For entrepreneurs looking to set up a brick-and-mortar store, Nottingham is the place to be, according to our research.

Maintenance services are crucial for the smooth operation of a retail store, not only for setting up, but also for repairs in years to come. One of the highlights of Nottingham is its low handyman costs, averaging just £24 per hour, which can significantly reduce these inevitable maintenance expenses.

Whether it’s for day-to-day communications with employees, suppliers, or customers, a mobile phone plan is another essential expense. Nottingham offers one of the cheapest phone plans of all the locations we analysed, at £11.50 per month. Internet costs are also quite reasonable, at only £28 per month, helping to keep overall operational costs low.

In terms of the space itself, it will cost businesses owners an average of £105.64 per square foot to buy a physical store, one of the most affordable costs of all the cities we analysed. For businesses seeking lower set-up costs, renting a retail store will cost an average of £1.10 per square foot each month. A workforce unemployment rate of 6.5% means businesses here can benefit from a larger pool of available workers.

2. Cardiff

Our research showed that Cardiff is the second-best location for setting up a brick-and-mortar store. The average handyman cost here is the same as in Nottingham £24 per hour, and Cardiff offers the cheapest phone plan among all cities we analysed at just £11.11 per month. Internet costs are also affordable, averaging £27.78 per month, the third cheapest in the country.

With 13,610 parking spaces available, shoppers shouldn’t struggle finding a space to park their car when visiting. Retail space rental is very affordable at only £1 per square foot and Cardiff's workforce unemployment rate of 5%, ensures a readily available pool of workers for your business.

3. Coventry

Coventry takes third place in our ranking, offering a mix of affordability and practicality. While handyman services are slightly higher at £28 per hour, mobile plans are a reasonable £11.50 per month, and internet costs £28 monthly. The city boasts 9,198 parking spaces, ensuring convenience for shoppers.

Renting retail space is reasonable, at 88p per square foot, and purchasing a store is the fourth cheapest at £58.87 per square foot. With a workforce unemployment rate of 5.8%, Coventry provides a robust pool of available staff, making it a strong contender for a retail store.

The most affordable cities to set up a brick-and-mortar store

Budget is one of the most important things you’ll manage when setting up a brick-and-mortar store. So, in light of this, we’ve looked specifically at metrics associated with costs to rank which are the most affordable cities to set up a physical store.

Rank	City	Cost of a handyman	Cost of a monthly mobile plan	Cost of monthly internet	Monthly cost per sq ft to rent a retail space	Price per sq ft to buy a retail space
1	Plymouth	n/a	£11.25	£26.60	£0.76	£19.90
2	Newport	£24.00	£12.00	£27.78	£0.82	£32.93
3	Nottingham	£24.00	£11.50	£28.00	£1.10	£105.64
4	Cardiff	£24.00	£11.11	£27.78	£1.00	£178.10
5	Coventry	£28.00	£11.50	£28.00	£0.88	£58.87
6	Southampton	£30.00	£11.25	£28.23	£0.68	£168.21
7	Wolverhampton	£30.00	£12.00	£28.62	£0.77	£132.48
8	Leeds	£26.00	£12.33	£30.00	£1.33	£103.66
9	Milton Keynes	£29.00	£11.25	£30.00	£1.71	n/a
10	Preston	£25.00	£12.33	£30.06	£1.79	£146.30

1. Plymouth

Plymouth is the most affordable place to set up a brick-and-mortar store. For businesses looking to open up here, it’s great to know that the coastal city was actually voted as being the second-most appreciated city for brick-and-mortar retail in 2022, so there’s plenty of customers looking to shop in-person here.

On par with the other locations in terms of phone plan, costing £11.25 and with the cheapest monthly internet of all locations, costing £26.60 per month, Plymouth retail experiences low costs all round. The city also has the cheapest cost to rent per square foot, costing £0.76 per month. Not only this, but it’s the cheapest location to actually buy a retail space, at just £19.90 per square foot!

2. Newport

Newport is the second-most affordable place to set up a brick-and-mortar store, costing a reasonable £24 for a handyman and £12 for a monthly mobile plan. It costs around 82p per month for each square foot of retail space, and an economical £32.93 to buy each square foot of space up front.

3. Nottingham

Nottingham is the third-most affordable city for setting up a brick-and-mortar store. Similar to Newport, handyman services cost £24, and a mobile plan is slightly cheaper at £11.50 per month.

Renting retail space is more expensive here, at £1.10 per square foot, and purchasing retail space is considerably higher at £105.64 per square foot. While Nottingham offers competitive service costs, the higher real estate prices might be a consideration for entrepreneurs on a tighter budget.

The worst locations to open a brick-and-mortar store

While some cities offer a prime environment for a successful store, others are more challenging. Evaluating factors such as costs, footfall, and local workforce can help you navigate these challenges effectively and choose the best location for your business.

Rank	City	Cost of a handyman	Cost of a monthly mobile plan	Cost of monthly internet	No. of parking spaces in the area	Monthly cost per sq ft to rent a retail space	Price per sq ft to buy a retail space	Workforce unemployment rate (%)
1	London	£39.00	£15.13	£30.55	5,702	£3.02	£416.98	5.0
2	Luton	£35.00	£13.56	£31.25	7,363	£1.99	£626.30	5.1
3	Sunderland	£23.00	£13.67	£34.50	6,280	£3.14	£209.76	4.1
5	Reading	£39.00	£15.00	£27.75	10,002	£3.52	£147.25	3.5
6	Edinburgh	£42.00	£12.43	£33.05	7,590	£0.66	£242.86	3.5
7	Belfast	n/a	£12.67	£32.00	13,466	£1.65	£344.35	2.2
8	Bristol	£28.00	£12.60	£33.11	11,692	£1.22	£330.95	3.6
9	Kingston upon Hull	n/a	£11.19	£33.00	9,642	£1.00	£121.62	3.0
10	Milton Keynes	£29.00	£11.25	£30.00	10,268	£1.71	n/a	3.6
11	Blackpool	£27.00	£12.00	£32.50	5,729	£0.39	£87.13	3.6

1. London

London presents a multitude of hurdles for setting up a brick-and-mortar store. As well as being the most challenging city to open a store considering all metrics in our study, it also stands out as the most expensive overall. This is perhaps unsurprising given that the bustling capital is well known for its elevated living and operational expenses.

For instance, handyman services in London cost £39, reflecting the high demand and premium for skilled labour. Additionally, essential utilities like a mobile phone plan and internet service come in at £15.13 and £30.55 respectively.

Renting retail space in London averages £3.02 per square foot, a substantial cost for any business, particularly new ventures. For those considering long-term investment through purchasing property, the price skyrockets to £416.98 per square foot.

2. Luton

Luton is another challenging location for opening a brick-and-mortar shop. As well as being the second-most difficult location to set up, it’s also the second-most expensive, though it fares slightly better than London.

The average cost of a handyman is £35 per hour, still on the higher end of the spectrum. A monthly mobile plan in Luton costs £13.56, reflecting the overall expenses associated with maintaining a business in the city.

The cost of renting and buying shop space in Luton is another consideration. Renting costs £1.99 per square foot, providing a slightly more cost-effective option compared to London's higher real estate costs. Buying shop space in Luton is £626.30 per square foot, which, while still significant, might be more manageable than the high prices typically found in the capital.

3. Edinburgh

Edinburgh comes third, presenting notable challenges for setting up a brick-and-mortar store. A handyman costs £42, almost double that of Nottingham, the most affordable city in our analysis. The monthly cost for a mobile phone plan in Edinburgh is £12.43, and internet costs are £33.05 per month.

However, Edinburgh offers 7,590 parking spaces, making customer access convenient. Real estate costs are a mixed bag: renting a store is quite affordable at £0.66 per square foot, and buying costs £242.86 per square foot.

The most affordable cities for property costs specifically

One of the most crucial aspects of opening a brick-and-mortar shop is securing a space to call your own. Renting a store space is a popular option, especially for businesses aiming to minimise startup costs. This approach is particularly beneficial for smaller, newer companies.

With this in mind, we took a closer look at how much it costs to rent a store, focusing on the cost per square foot, per month, of the space.

The Most Affordable Locations to Rent per Sq Ft			The Most Expensive Locations to Rent per Sq Ft
Rank	City	Monthly cost per sq ft to rent a retail space	Rank	City	Monthly cost per sq ft to rent a retail space
1	Blackpool	£0.39	1	Reading	£3.52
1	Stoke-on-Trent	£0.39	2	Sunderland	£3.14
2	Liverpool	£0.51	3	London	£3.02
3	Edinburgh	£0.66	4	Luton	£1.99
3	Manchester	£0.66	5	Preston	£1.79
4	Southampton	£0.68	6	Milton Keynes	£1.71
5	Sheffield	£0.70	7	Bradford	£1.65
6	Swansea	£0.73	8	Belfast	£1.65
7	Derby	£0.75	8	Leicester	£1.49
8	Plymouth	£0.76	10	Glasgow	£1.48

Blackpool and Stoke-on-Trent are the most affordable locations for those looking to rent out a retail space, costing a mere 39p per square foot each month. In comparison, businesses hoping to set up a store in Reading can expect to pay £3.52 per square foot.

After Blackpool and Stoke-on-Trent, Liverpool is the next most affordable, costing an economical 51p per square foot each month.

While some entrepreneurs may choose to rent, others would prefer to buy the retail space outright. This option, though not always beneficial for small companies, gives more established businesses a great opportunity to reap the benefits of long-term investment, plus a sense of stability within the store environment.

So, to find out which cities are the most affordable and the most expensive to do this, we also looked specifically at the overall cost of a retail space, per square foot.

The Most Affordable Locations to Buy per Sq Ft			The Most Expensive Locations to Buy per Sq Ft
Rank	City	Price per sq ft to buy a retail space	Rank	City	Monthly cost per sq ft to rent a retail space
1	Plymouth	£19.90	1	Luton	£626.30
2	Newport	£32.93	2	London	£416.98
3	Coventry	£58.87	3	Belfast	£344.35
4	Swansea	£69.03	4	Bristol	£330.95
5	Liverpool	£79.97	5	Southend-on-Sea	£310.43
6	Derby	£86.12	6	Leicester	£243.90
7	Blackpool	£87.13	7	Edinburgh	£242.86
8	Leeds	£103.66	8	Sunderland	£209.76
9	Nottingham	£105.64	9	Stoke-on-Trent	£182.56
10	Sheffield	£115.03	10	Cardiff	£178.10

As we’ve seen, Plymouth has the cheapest of any location to buy a retail space per square foot, costing just £19.90. So, iwith the average retail space being 2,000 square feet, it would cost £38,000 for the space overall.

However, if we compare this to the most expensive location for a retail space, Luton, this hypothetical price skyrockets to £1,252,600 — quite a significant difference.

Newport takes second place, costing only £32.93 per square foot, followed by Coventry, costing just £58.87 for each square foot of retail space.

What to consider when setting up a brick-and-mortar shop

Opening a brick-and-mortar store is an exciting journey that involves careful planning and strategic decision-making. To help out aspiring entrepreneurs, Alex Miles at Capital on Tap shares some essential steps to guide you through the process and ensure your store's success.

1. Create a financial plan

Firstly, you’ll want to create a detailed budget that covers all key expenses you’re anticipating, including rent, renovations, inventory, staffing, and marketing. Ensure you secure enough funding or a line of credit to cover these costs and leave extra room for any unexpected expenses. Make sure to develop a cash flow plan to manage operational costs, particularly in the first few months when revenue may be lower.

For extra help, a business credit card is a great option to help manage your business money in a more streamlined way. Businesses looking to manage their expenses, build a professional credit history, and support cash flow can benefit from the financial freedom a business credit card offers.

2. Choose your location

As we’ve seen, choosing a location isn’t always straightforward. Choose your location carefully, because it’s where you’ll hopefully be for a while! Firstly, study the demographics of the area to ensure it aligns with your target market, considering age, income, lifestyle, and shopping habits. If you can, choose a location with high foot traffic and good visibility to attract walk-in customers. Plus, proximity to complementary businesses can also drive more traffic and ultimately more buzz around your business.

3. Comply with regulations

Verify that your business type is permitted in the chosen location and organise all necessary permits and licences before starting operations. Ensure compliance with local health and safety regulations, including building codes, fire safety, and accessibility standards.

4. Analyse your competitors

Do some research into local competitors to understand their strengths and weaknesses. Determine what unique value your shop can offer to differentiate itself. Make sure you stay informed about market trends and customer preferences in the area to tailor your product offerings and marketing strategies accordingly.

5. Hire quality staff

Your staff are the lifeblood of your brick-and-mortar store, so choose your employees carefully, and provide them with necessary training to do the best possible job they can. Hire qualified staff and provide comprehensive training to ensure excellent customer service, develop an employee handbook outlining policies and procedures, implement an efficient inventory management system to keep track of stock levels, minimise waste, and ensure popular items are always available.

Methodology

We utilised data from various reliable sources including the Office for National Statistics (ONS) to understand current trends in online and physical retail sales. Key metrics evaluated in the study included:

Handyman Costs: Average costs for handyman services in each city.
Internet Expenses: Monthly costs for internet services.
Parking Availability: Number of parking spaces in each area.
Retail Space Costs: Average monthly costs per square foot for renting and buying retail space.
Unemployment Rates: Workforce unemployment rates to gauge labour availability.

The data were aggregated and analysed to rank the cities based on affordability and suitability for opening a brick-and-mortar store. The data is presented in averages.

Alex Miles COO