Click and collect? Consider and cash in!
Who doesn’t love the convenience of Click and Collect? From picking up your Tesco shop without even having to turn off the engine, to not having to worry about being in for delivery of your latest ASOS splurge, there is no doubt that this service has grown exponentially in the last few years. Even Ikea now have an ‘order and collect’ point in Westfield Stratford. But if you are a tenant of retail premises, what should you be considering first?
Many retail tenants pay a proportion of rent based on their turnover at the premises. Where a tenant is offering a click and collect service, the drafting of the clause will need to be clear as to whether items ordered online and collected at the premises are included in the store’s gross turnover figures. A shop in a convenient or prominent location might receive a disproportionate amount of parcels being ordered for collection, increasing the gross turnover for that store, and therefore increasing the turnover rent due. This could be a double blow where the tenant is already paying a high base rent for the premises precisely because of their good location, so a well advised tenant should try to negotiate this out of any calculations.
A tenant who wants to offer a collection service might also need to alter their store, perhaps installing a designated entrance or section within the store for customers to collect, or designated bays in car parks as pick up points. Before doing any of these works, a tenant should check whether landlord’s consent is required under the alterations provisions of the lease, and also whether any planning or listed buildings consent needed.
Where a tenant is offering click and collection of its own products alongside its usual offering, this would probably be considered ancillary to the main use both in planning terms and in the context of the user clause in the lease, but what if a retailer wants to partner with an online store to offer collection from their premises in return for the (hopefully) impulse buys of the person collecting? Parcel services such as Hermes or Collect+ often use convenience stores or smaller shops as drop off and pick up points for online retailers like ASOS or eBay, and Amazon have experimented with siting lockers from which the customer collects their parcel. In these cases a tenant should look carefully at both their user clause and also the provisions dealing with sharing of occupation in the lease. If they are going to be giving over an area of the premises for receiving or collecting a large volume of parcels, could this be tantamount to sharing occupation? If there are lockers or an area within the store for the parcel service, do they need to have provision in their lease to grant licences to occupy or to share with concessions? And can collecting a pair of shoes really be considered a use ancillary to buying a pint of milk?
The convenience of click and collect is something that shoppers increasingly expect and, with a bit of planning and consideration, a benefit that many retail tenants can now offer.