The high street was hit hard in 2018 and this trend appears to be continuing into 2019. The casualties include some of the nation’s favourite shops: Maplin, Debenhams, Patisserie Valerie and Marks & Spencer are among those that have been forced to close or downsize in response to changing consumer habits.
So, what does this mean for shoppers and retailers?
We investigated retail outlet closures across the UK and surveyed Brits to find out how they feel about the way their local high streets are changing. With the help of expert insight from James Child, retail analyst at Estate Gazette, we’ve explored what is happening to the high street today, and what impact this will have on its future.
Is it only a matter of time before the high street becomes a ghost town? Or will something new rise from the ashes? Read on to find out what’s in store for your local high street.
During 2018, Britain saw over 1,500 stores suffer as a result of Company Voluntary Arrangements (CVAs), administrations, and store closures. This amounts to approximately 50,000 jobs lost, across some of the country’s top retailers, including House of Fraser, Toys R Us, Next, Marks & Spencer, Debenhams, and many more.
Food & beverage and fashion brands are predicted to be the next victims of the high street with Patisserie Valerie and Marks & Spencer already announcing closures this year.What does the dying High Street look like?
Displaying store closures/which regions have been impacted the most
James suggests there are many different elements that play into this decline:
Public opinion echoes James’s analysis. According to our survey, 64% of people said they prefer to shop online because whatever they need is available at all times.
While the majority of people (75%) choose to do their shopping both online and in store, the younger generation seems to be more inclined to avoid the high street altogether – 18% of 25-34 year olds do all of their shopping online.
It seems consumers are frustrated with the less-than-satisfactory experience of shopping on the high street. Their main reasons for avoiding physical stores include:
Some also said that they stay away from the high street due to disabilities and health issues, suggesting that the current facilities are failing to be inclusive for all consumers.
We might not be choosing to shop on the high street as regularly as we used to, but Brits are still concerned about what might happen to it – 61% say they’re worried that the high street might disappear due to recent store closures they’ve heard about in the news.Worrying about the High Street
We asked Brits how concerned they were about their local high street disappearing. We also asked how many of them actually shop in-store rather than online.
But James says there's no reason to panic just yet.
While retailers may be struggling to withstand the recent changes, James says the core element that keeps the high street functioning is still very much alive.
“Locals still need service-led offers. Services such as dry cleaners, key cutters, nail bars – even the Post Office and local bank. I’m pretty sure you can’t get your haircut online, right?”
In addition to existing services, James says the retail closures have opened new opportunities for alternative businesses: “the growth experienced in the food and beverage sector is perhaps the greatest beneficiary of these changes, as well as the rise of trampoline parks, climbing walls, and other entertainment and health offers.”
According to recent analysis from Radius Data Exchange, people are looking to take advantage of these empty spaces.
“There have been record numbers of change of use to restaurants and cafés, accumulating over 3,400 separate applications since 2013. Flexibility in the planning sector is needed to encourage future redevelopment and the repurposing of our high streets. Thankfully, the data shows that we are on the right track,” James says.
It seems the British public has already started to recognise this shift. We asked what sort of things people expect to see on the high street in ten years, in order of prevalence. Restaurants, coffee shops, and bars all found their way to the top of the list, while retailers (especially independent stores) fell lower down:
It would seem that saving the high street isn’t quite as simple as transforming old shops into new ones.
We have seen an increase in applications for bridging loans to finance high street property conversions for change of use from shops to offices and residential units.
As James points out, Radius Data Exchange has identified that over 18 million square feet of retail space has become vacant over the last year. Surely not all of those empty shops can become trendy new foodie hotspots?
It seems local governments are trying to think outside of the box – literally. Instead of moving different products onto the high street, they want to move people there.
“Applications for retail-to-residential conversions are up almost 10% year-on-year, resulting in the proposal of an additional 13,000 residential units from around 1,600 applications. In London, 1/3 of shopping centres have plans for residential development, a great example of how to bring people back into central locations,” James says.
As the high street transitions into a residential space, James says the area must also take on a new sense of character. Rather than being predominantly about retail, the high street must adopt community values, blending housing with leisure and business.
“The challenge in the future will be ensuring that locals have real reasons to actually visit these locations, and create more than a row of shops, but proper destinations,” James says.
Based on consumer feedback and expert insight, the high street has a lot of boxes to tick if it’s going to remain relevant for future generations of consumers.
James says: “there needs to be a reduction in the amount of retail space, replaced with other mixed-use schemes and residential elements to encourage locals to engage in their local areas. The high street of tomorrow will be easily accessible, safe, clean, and able to enjoyed by all.”
Our survey respondents agreed that convenience and accessibility were key factors that needed to be improved. The changes people most want to see on the high street include:
If the high street is going to survive, it needs to offer exemplary retail spaces, residential accommodation, and all the amenities that modern consumers desire – but what will this actually look like?
“Its physical make-up will be flexible, with an onus on fluid change, frequently,” James says. “The high street will become a physical manifestation of community, where people are able to live work and play in one social arena. Supported by local authorities and the retailers that work to create those places special for those that live there.”
Technology is one of the main tools that can be used to create a high street that looks amazing and meets different consumer needs, offering everything from free Wi-Fi to improved transport links and electric car charging points.
But it seems the key to revitalising the high street lies in the heart of the high street itself – the people who shop, work, and live there.
“Town centres and high streets must be at the forefront of engagement in their communities. Listening to what people want as opposed to giving them what they think they want,” James says. “Introduce more housing into central locations, make parking free to encourage further footfall, but the biggest take away surely has to be – make your high street interesting again.”
We have worked with Sam Edwards, Illustrator, to bring James’ predictions to life.
Your business could be a key part of transforming the high street into something that works for consumers once again – find out how a bridging loan could help you become part of the solution.
Find it useful? Please share!
Last updated: 08 October 2019 | © KIS Finance 2018 |