What has happened to our high streets and how can we bring them back to life?
Over the last few years, a lot has changed within the retail industry, with more shoppers going online for convenience. In 2020, 17,500 stores closed their doors permanently this included some of the biggest brands in the UK such as Topshop and Debenhams. The number of closures far outweighed the number of new store openings, meaning there was a net decline of 5,251 stores over the first six months of 2021.
Increase in Online Sales
Working from home may have fuelled the way people shop, rather than heading straight to the store they opt for the most convenient way to get what they need. In 2020 87% of the UK population made an online purchase.
When shopping online consumers have access to thousands of shops with just one click. More retailers are giving consumers options on how they pay for their goods, this could be in instalments or buy now pay later via companies such as Klara or Clearpay. There are more delivery options such as next day, click + collect and some brands are even offering same-day delivery to certain areas in the UK.
Online sales are not slowing down even though restrictions have been lifted and high streets are seeing increased footfall, but this footfall is still not pre-pandemic levels.
Shop Local
When the pandemic hit, the Government advised people to keep local, this saw a rise in local shops becoming more popular and even some brands moving away from the busy city centres/shopping malls and heading to small towns.
People have said they found it safer to shop local as it was quieter, and they wanted to support the local shops and local economy rather than busy city centres. Convenience became the key to where shoppers went.
Changes to our High Streets
During the height of the pandemic, it felt as if every week another retail giant announced the closure of stores. A few years ago, you couldn’t go to any shopping centre or high street and not come across a Debenhams or an Arcadia Group shop but last year they had to close all their doors, but this wasn’t the end of our favourite stores with two online giants coming into save them.
Boohoo brought out Debenhams turning it into an online store and ASOS brought Miss Selfridges and Topshop adding to their impressive portfolio.
Since the collapse of BHS in 2016 83% of the UKs department stores have closed. There were over 400 department stores, including the likes of BHS, House of Fraser and Beales but just 79 remain.
Costar (Commercial Real Estate Information Company) has found that out of the 388 retail units that used to host department stores, 237 remain empty and 52 are being repurposed, into gyms, hotels, leisure facilities and even office space. In August 2021 Gravity Entertainment opened a new virtual arcade including e-karting, bowling, and crazy golf in the old 80,000 sq. ft Debenhams store in Wandsworth, and they are expected to repeat this all over the UK.
It’s not only empty department stores being repurposed John Lewis announced they are making changes to their Oxford Street store by turning the top floors into office space and consolidating retail space. It is predicted over the next few years more of the larger stores will become hybrid spaces, adding coffee shops and restaurants within their trading areas. This has already begun, Selfridges flagship store in London now has 19 restaurants including a popular rooftop bar.
As big brands leave our high streets and go online, one of the biggest online selling sites is heading to our high streets. Amazon has recently announced they are opening at least 30 high street stores in the UK. Their first London store, Amazon Fresh, opened in March this year as a till less shop, customers simply scan a barcode as they enter and then walk out with the items with Amazon billing to the customer’s account which has a payment method set up.
Amazon is not the only online store heading into physical stores, other online brands have recently been collaborating with supermarkets and department stores such as In The Style and Missguided who have begun selling clothes in over 100 ASDA stores and it’s not only clothing brands that are collaborating with supermarkets, over the past few years Yo Sushi! has opened over 300 kiosks in Tesco and Sainsburys.
The Rise in Pop Up Stores
Due to the uncertainty on our high street companies are starting to take out shorter store leases or creating pop up stores. The pop-up industry is responsible for £2.3 billion in revenue per year.
What are the benefits of POP-UP stores?
- Cost savings – rents for a pop-up can be as low as 20% of normal rates.
- Less risk – short-term leases are less risky if things don’t work out retailers are not locked long-term.
- Test the market – See how popular the products you are offering will be and seek feedback from customers.
- Test the location – see how well your products sell in different locations.
- Brand awareness – a chance to raise awareness of your product and build brand loyalty.
- Creating urgency – customers are often more willing to buy immediately if they feel the shop or the item will only be there for a short period.
- Adding a revenue stream – as an addition to your online business.
The hospitality industry has been doing pop-up locations for years, in the summer London is full of pop-up bars and restaurants to capture the tourist’s trade.
How The Government Plan to Help
On 15th July 2021, the government long term plan to support the regeneration of high streets was launched. This is a major plan to help deliver changes across England.
15 Town Deals totalling £335 million will be funded, including £19.9 million to place the river Thames at the heart of the community in Grays through transforming the riverfront area into a community hub with entertainment and leisure venues and improving water-based transport options. Town Deals have now been offered to all 101 places that were invited to develop proposals.
Details have been published setting out how community groups can bid for up to £250,000 in matched funding from the £150 million Community Ownership Fund to take over local pubs, theatres, shops, and sports grounds which run the risk of closure if they are not taken over.
This new funding follows the announcement in December 2020 when the government announced they would be investing £830 million in the Future High Streets Fund. This will be split across 72 areas, helping them transform into a place where people want to work, live, and shop and they are hoping this money will help protect and create thousands of jobs for local people and boost local economies following the pandemic by attracting tourist to historic markets and attractions.
As an example, Swindon will receive £25 million with plans to modernise its town centre, including a new public transport hub and improved cycle and pedestrian routes.
Here at Urban, we have experience working in busy high streets and helping our clients refurbish their stores, so if you have a project coming up please give us a call and we would love to help.
Further information
- https://www.retail-week.com/stores/nearly-50-high-street-stores-shuttered-per-day-in-2021/7040533.article
- https://www.alphagraphics.co.uk/blog/retail/the-rise-of-pop-up-shops-for-online-retailers/
- https://www.gov.uk/government/news/830-million-funding-boost-for-high-streets
- https://www.ons.gov.uk/businessindustryandtrade/retailindustry/timeseries/j4mc/drsi
- https://www.bbc.co.uk/news/business-58433461
- https://www.thecaterer.com/news/gravity-wandsworth-debenhams-bar-restaurant-booking
- Government strategy to regenerate high streets – GOV.UK (www.gov.uk)
