Blogs/Vlogs

What does the future hold for our high streets?

24 June 2019

There has been a lot of focus on restaurant, retail and banking industries in recent years, due to the high levels of store and branch closures. Whether it is rent, rates and salary increases, Brexit uncertainty or the shift to online buying, the amount of high street closures has been staggering. What sort of industry is filling these vacant units and who is surviving these challenging times?

Service and specialist style shops have seen growth

Pubs and bars have seen massive growth in cities with large student populations (Liverpool, Manchester and Leeds), with these cities building up a reputation for a thriving nightlife. Similarly, since 2013 a thousand extra hair and beauty salons have sprung up in town centres throughout the UK. Restaurants seem to be an exception, with the casual dining sector in particular suffering more than most. However after prolonged growth and investment, many would argue that the recent spate of CVA’s is the market correcting an overcapacity which has built up in recent years.

More “experiential” shopping: shoppers value the experience they receive rather than just the product they walk away with

Earlier this year Primark opened its biggest high street store in Birmingham complete with three food venues (including a Disney-themed café), a Disney shopping area, a nail bar, hair and beauty studio in partnership with London’s Duck & Dry, a barbers and a Hogwarts Wizarding World area. This was a headline event, but not a new trend. Tesco’s began opening salons in store as far back as 2011 and book stores have been opening cafés to compete for additional revenue for longer still.

Traditional retail is tying itself to service style offerings to get customers in store. Once they are in store, they can benefit from a real-life retail experience.

Potentially more housing

With a length of less than 100 yards long, Wikipedia reliably informs us that Holsworthy high street is ‘the smallest High Street in Britain’, consisting of only three shops. This is an extreme example, but does raise the question; do we need large high streets or would a series of smaller high streets work better? At the end of 2018, the government released a planning consultation on converting retail units to residential housing and adding extra storeys to existing buildings to create new homes. Clearly, loosening current developing restrictions to replace stores with houses haphazardly would benefit a few house developers at the expense of the wider community. However with the involvement of town planners, reshaping residential and commercial space in towns could achieve the ‘holy grail’ of helping high street business and our current shortage of housing.

In some areas the empty buildings remain vacant and aren’t being replaced

There is no getting away from the fact that despite the best efforts of councils and business alike, vacancies have risen. In city centres like Newport, Sheffield and Blackpool at least one in five shops is empty. CVA’s offer companies an opportunity to rescue themselves, but most plans will include significant store closure in the process. The impact of all this is felt by residents as well as the remaining shops on the high street which have less footfall as a result. ‘Fixing’ our high streets is a key objective for the government, but what steps should be taken is a moot point. Brexit complicates the matter further as it both increases uncertainty for high street companies whilst seemingly dominating government policy and debate.

Service style shops and companies which change their offering to meet consumer demands are surviving these turbulent times. However, store openings still lag behind store closures and it is clear that further steps need to be taken to protect against the negative effects of vacant high streets.

If you have any queries or would like to discuss this issue further, please contact your local UHY adviser. Alternatively, fill out our contact form here.

References:

The Guardian, Primark defies high-street exodus with Birmingham megastore

Campaign, Tesco unveils Your Beauty Salon business

Centre for Cities, Converting shops into houses is not the panacea for struggling high streets

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