The British High Street has been in decline for some years now, but could it be that there are signs of a revival? There are several front-line retailers operating out of town as well as online, all looking to have a high street presence. If this trend gathers momentum, it will help many high streets to transform.
The decline is historical and despite various government schemes and local authority initiatives it has proved difficult to reverse the trend, however much the various grants and funding have been applied. At the end of the day the market rules and it’s difficult to buck that trend unless there’s a genuine economic reason for change.
The reasons for the decline are many and varied. Expert observers and campaigners in retail agree that retailers have faced a perfect storm, with many thousands of store closures resulting, from small independents to national chains. Covid accelerated the decline but in truth, retail decline on Britain’s high streets had been going on for some time before Covid.
Online Shopping – the sheer convenience and range of goods instantly available and delivered to the door offered by the likes of Amazon have had a massive impact on the UK high street. As more people have become familiar with using the internet, they have recognised that buying this way is not only more convenient but often cheaper than buying in a store. Visiting shops becomes a hassle in comparison.
Too Many Shops that are not profitable – faced with this sort of competition retailers, whether small family businesses or nations outlets, cannot afford to have underperforming shops. Many national retailers expanded during the economic high performing years, leaving them dangerously exposed when spending became tighter.
Incomes have been squeezed – The Covid and war conflict induced cost-of-living crisis in the UK has contributed to the fact that consumers do not have a lot of spare cash for retail therapy. Shop prices have been rising as the country caught a dose of inflation leading to a decline in discretionary spending. Brexit too may have had its effects on food prices.
The cost of operations – Inflationary pressures also fall on retailer overheads, with rising business rates and the national minimum wage or the national living wage paid to over 23s has been increasing relentlessly. The debate about whether business rates should be adjusted to enable traditional retailers to compete with online traders has so far not produced a change.
Bad local authority town planning and management – some authorities have managed their towns far better than others. Allowing hollowing out by giving permission for large out of town and edge of town retails parks sucks the life out of the traditional centre. Car parking too is a major source of trouble. It may have helped with local authority finances in the short term to have high parking charges, but in the long-term motorists are driven out to free parking locations in retail parks. Most people have a large out-of-town retail park within a reasonable distance without the cost of parking and the fear of a parking ticket.
Retailers on Britain’s high streets, many of them independent traders, adapt and find ways to survive but many will tell, it’s tough. If they don’t have the right offering, ideally backed by an online presence as well, and they fail to implement a comprehensive range, real value, convenience, and/or a great customer experience, they will struggle to survive.
National retailers along with the banks have taken the view that closing underperforming stores and focusing on a smaller number of profitable outlets in city centres is their only option, hence the massive holes (vacant premises) in many high streets.
According to Office of National Statistics (ONS) figures, with the overall UK retail market stagnant or growing only slowly, large retailers go all out for market share, and in that fight online retailers have increased their share from around 20 per cent in 2018 to around 30 per cent today, and they reached almost 40 per cent during the peak of Covid.
Some town centres are beyond the pale when it comes to revival, it’s hard to see how they will ever recover their former glory. However, some have weathered the storm better than others mainly due to better planning and town management.
Once a town centre reaches a tipping point, on the number of vacant premises, it drags down the rest;, shoppers don’t like visiting an abandoned and deserted townscape and no new retailers want to invest in locations when their neighbours are boarded up shop fronts.
In these locations landlords are loath to invest more money into their buildings to meet the latest energy efficiency standards when rents they can achieve, if indeed they can achieve any, are so low.
So, who’s moving to the high street? Several retailers it seems, some of whom have been trading only on out-of-town retail parks to-date. Take Kingfisher’s Screwfix for example: Kingfisher, owner of DIY chain B&Q recently opened 16 city-centre Screwfix stores and is planning to open up to 100 in London and other cities around the country.
Reasoning that Screwfix’s customers are working harder than ever, the company says they need convenience, so their local stores plan to stock 3,000 of the most popular items bought, with another 31,000 available in store next day. Not only Screwfix, but Kingfisher also plans to open B&Q convenience stores to test demand.
Pet care specialist Pets at Homes are also taking on high street stores, as chief executive Kathryn Imrie says, to “offer pet owners in urban areas easy access to the same high quality great-value products our customers expect - right in the heart of local communities.” The company is now on its seven such openings.
Hayes, Travel, the company that took on the failing Thomas Cook stores has said it wants to add to its 500-store estate. Defying the online trend, company chair Dame Irene Hays says that: “People want a human being there to help them.”
Mango, the Spanish fashion giant, since launching its first store in 1999 opened 10 new high street outlets last year taking its total estate to 60 with another 20 planned to open by the end of 2024. With a turnover of £2.6 million, the company says only one-third of revenue is generated online.
Another example of the return to the UK high streets is French beauty brand, Sephora. The retailer quit Britain’s high streets 18 years ago stifled by competition from Boots and Superdrug but has now made an energetic comeback opening seven stores in Kent, with others planned for Manchester, Birmingham and London.
A new realism, meaning lower, more competitive rents, is one of the attractions. Landlords are having to accept it, “suck it up” in the current vernacular. According to Savills retail rents have fallen by 21 per cent between 2017 and 2023.
The trend back to the high street appears to be taking advantage of a shifting consumer psychology, going against the hassle and often expense of returning, particularly online fashion items, when purchases can be sampled and made in conveniently located stores.
Could this be the start of a fight-back of the Great British Shop on Britain’s high streets?
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