The Future of the High Street: Termination or Regeneration?
The UK has lost 83% of its major department stores in the five years since the collapse of the BHS chain, according to commercial property insight firm CoStar Groupi .
When Covid-19 lockdowns accelerated the trend for declining high street visits in favour of shopping online from home, the further decrease in footfall in-storeii was the final straw for many retailers.
Disney and Gap are just two of the companies to have recently announced the closure of all UK stores, amid moves to online-only models.
In total, more than 8,700 chain stores - an average of nearly 50 outlets a day - closed in British high streets, shopping centres and retail parks in the first six months of 2021, research by the Local Data Company suggestsiii.
Not only does this present the question of how jobs lost in retail stores will be replaced elsewhere, but it also leaves a physical dilemma to be solved: what to do with the unwanted buildings once retailers move out?
Of the 83% of department stores that closed their doors in the last five years, more than two-thirds remain unoccupied.
More innovative, unique, and community-led high streets
There are promising signs that this doesn’t spell the end of high streets but rather, a new era for them.
Half the population experienced their home becoming their office during lockdowns, and the majority expect that to at least partly remain the caseiv. Home workers shopping locally have already given a boost to small independent storesv who have increased in number by 3%, according to Deloitte.
Moreover, 2020 saw a surge in entrepreneurialism, with 835,000 new businesses launching according to Companies House. Nearly 40,000 of those new firms were set up to trade solely from their home via mail order or the internet but presumably, if successful, many will go on to seek premises.
Interestingly, within that 40% year-on-year increase in new start-ups, one of the biggest booms was in pop-up food stalls. This could again indicate ideas being tested before expanding into commercial premises, or they could indicate an evolution in how we want to move around our high streets.
While the high street we once knew may have gone, a new high street that prioritises experiences and socialising is taking over. Demand is high for more cafés, bars, office supply shops, printers, and local IT support businesses. It is also expected that the number of internet cafés and co-work spaces will increase for those who work from home but miss an office environment.
Forward-thinking town planners are already taking note, and the “20-minute neighbourhood” is a concept increasingly discussed. It can take many different forms but is essentially a people-focused way of planning, where all day-to-day activities are located within a reasonable walking distance or short cycle from home.
Some brilliant plans are already coming to fruition. Thanks to funding from the government’s Future High Streets Fund, the local council in Stockton on Tees is planning a spectacular reconfiguration of the town centre, including a riverside park, leisure centre and library. High Wycombe council, the recipient of an £11.7m grant, plans to acquire vacant shops and make them available at affordable rents to independent businessesvi. This spells good news for local jobs and community projects.
From high streets to ‘home streets’
Alongside these new initiatives to draw people back in to town and city centres, real estate developers are transforming buildings into blended residential and commercial hubs.
Developments undertaken by our own clients in Nottingham and Kent that bring together residential upper floor flats and commercial ground floor plots, for example, have sold extremely well.
Offering residential accommodation on our high streets is not only a great way to increase housing supply and protect local businesses by guaranteeing consumer footfall, but it will also help meet targets on reducing car journeys, such as the Transport for London goal that by 2041, 80% of journeys will be made by walking, cycling and public transportvii.
Overall, the traditional British high street has undeniably taken a massive hit, and this has harmed many businesses, both large and small.
However, there are signs that what is forming in its wake is something much more dynamic, multi-purpose and creative, with independent businesses moving in where chain stores have left, and people visiting for much more than just shopping.
We look forward to our continued role in transforming empty high streets into vibrant community spaces once again.
i https://www.bbc.co.uk/news/business-58331168
ii https://brc.org.uk/retail-insight/content/monitors/footfall-monitor/reports/202004_ff/
iii https://www.bbc.co.uk/news/business-58433461
iv https://www.bbc.co.uk/news/business-58559179
vii Encouraging cycling & walking - Transport for London (tfl.gov.uk)