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16th May 2019
What’s in Store for the High Street?

The Centre for Retail Research reports that there were 18,443 shop closures in 2018, and forecasts that a further 22,100 stores could close in 2019. Some types of unit have been hit more than others, with banks the obvious example; in 1989 there were 18,000 branches in the UK, but today there are just 8,000 still open.

Many experts, including retail guru Mary Portas, have analysed the changing fortunes of the UK High Street, trying to work out how it can be revitalised and remain relevant to new generations of web-savvy shoppers who increasingly prefer to browse and buy online.

Our town centres have been undergoing reorganisation for decades. They have long faced stiff competition from out-of-town retail with its one-stop offering and accessible and often free parking. Then online shopping came along and posed an even greater threat; online sales as a proportion of total retail sales had increased to 18% by September 2018. What’s more, the face of the High Street had already begun a period of enforced change as major chains, first Woolworths then BHS, closed their doors forever, and others such as M&S and Debenhams announced selective store closure programmes.

Changing tastes and spending patterns

Our ageing population has far-reaching implications for town centres, as it is estimated that over half of all retail spend is set to come from those aged 45 and over. As affluent baby-boomers reach retirement, town centres will need to adapt to older shoppers’ needs. Research also shows that millennial consumers spend less on fashion, preferring to spend their money on experiences like holidays and eating out.

However, there is some good news for retail. High Street shops are fast becoming part of today’s omni-channel shopping experience, where online and physical shopping meet, an approach adopted by major names like M&S, Next and John Lewis. Click and collect is bringing some shoppers back to the High Street and is proving good for business. Data from John Lewis suggests that 70% of customers make additional purchases when they collect in store.

Empty shops and offices given a new lease of life

Overall, a quarter of commercial space in city centres is retail, whilst 50% is offices. In the face of the UK’s housing shortage, there is growing interest in turning redundant commercial buildings into much-needed homes. There’s strong demand in regional towns and cities for office-to-residential conversions, due in part to the extension of permitted development rights which means that detailed planning agreements aren’t usually required. Around 42,000 homes have been created from redundant offices in England over the past three years.

Empty shop premises are also being turned into homes at an increasing rate. Research from the Federation of Master Builders estimates that 300,000 to 400,000 new homes could be created by utilising empty shops and the spaces above them. Over 85% of MPs canvassed by the group felt that this move could help provide more local housing and save retail parades from falling into disuse and decay.

With fewer than one in five councils building enough homes to meet official estimates of long-term demand, converting empty High Street premises into homes could turn town centres back into the diverse and lively environments they once were, as well as having a valuable role to play in tackling the housing shortage.

 

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