The Future of the High Street
For many, a stroll down their local high street has become a dispiriting experience. The latest research from the Local Data Company and PwC does nothing to improve the mood with 16 shops closing every day on average.
The problems affecting the high street are numerous:
- People want choice, ease and value for money, which is something easily provided by the online marketplace and not always provided by high streets.
- Changing habits are also a factor, people no longer want to go out just to shop, they are now looking for “destinations” and experiences. Many retailers are not changing their offerings quickly enough to attract these consumers.
- Fragmented ownership of many small high streets where several Landlords are competing against each other and not working together or with local councils to attract tenants or improve the offering in their area.
- The unfairness of the business rates system – the Government’s review found that the retail sector accounts for 5% of GDP but pays 25% of the business rates bill.
- Planning rules and lease clauses can restrict the use of buildings and how they are occupied, which can restrict how the sector can innovate to meet consumer’s expectations.
- Business failure results in increased vacancy rates causing the high street to feel unloved and uninviting depressing trade and resulting in further closures.
What can be done to save the high street?
- TACKLING THE PROBLEMS – in order to adapt the high street to keep up with the changing demands of the public, planning policy has a role to play by ensuring that existing and prospective high street occupiers do not have to satisfy restrictive and archaic regulations. Mike Ashley proposed that retailers who make more than 20% of their sales online should be subject to an ‘online retail tax’ of 20% on online sales.
- CREATING A WIDER APPEAL – for the high street to remain important for most towns and cities, it will need repurposing in order create an environment which appeals to a diverse audience – a place where people can eat, live, shop and have fun evolving from simply being a place to shop.
- Encourage a MORE COLLABORATIVE RELATIONSHIP BETWEEN LANDLORD AND TENANT. This should be more of a partnership, as both parties make an investment in the success of the retailers’ venture. There are inevitable constraints or issues which may have an impact on this, such as how the Landlord funded their initial investment, but where possible a collaborative approach should be fostered.
- LOOKING AT LEASES – the House of Commons’ report on ‘High Streets and Town Centres in 2030’ encourages landlords to provide ‘their tenants with good quality properties on a flexible basis and investing in and reconfiguring properties for new uses’. Several specific measures were put across including the removal of the traditional ‘upward only’ rent review, which have been banned in Ireland since 2010
These are just some of the ways we can stop tumbleweeds blowing down our local high streets by turning them back into bustling local communities. We will explore these ideas in greater detail in forthcoming articles
For more information on any of the points raised, please contact Damien Cann in our real estate team.
