- British High Street in flux as shops close, sales fall, and visits decline;
- The rise of online shopping is to blame, with traditional retailers struggling to adapt;
- But experts say High Street will adapt — expect to see more coffee shops in supermarkets, DJs in clothes stores, and other “experiences” to draw people in.
LONDON — The British have always loved shopping — Napoleon dismissed the English as a “nation of shopkeepers” as far back as the 1800s.
Nothing symbolises the British love affair with retail more than the High Street: the central shopping drag in towns, villages, and cities across the country.
“I think it’s a long-term, straight line decline and it’s happening all around Europe,” Richard Fleming, managing director and head of European restructuring at consultancy Alvarez & Marsal, told Business Insider.
The decline of the High Street means local shops and local jobs disappearing. The number of people working in retail shop floors across Britain fell by 2.4% in the first quarter of 2017. For many people, the decline is also a blow to local communities.
“We are now seeing a very big division in the country and I think it’s happening with retailers,” Robb Campbell, the CEO if Joseph Rowntree Foundation, told the BRC Retail2020 conference in London earlier this year. “I visited Sunderland a few months ago and the devastation to the city centre — Sunderland used to be like Glasgow or Birmingham, a thriving city centre with a really big shopping sector. When I was there it was becoming empty.”
What’s driving this rapid transformation? The internet and the dizzying rise of online shopping.
Fleming says: “All of Europe is seeing a reduction in physical footprints, just because of the way we’re shopping. My kids don’t go into a shop. If they want to buy something, it’s all online.”
‘The decline happened quite rapidly once the recession hit’
The High Street traces its roots back to Victorian Britain. The industrial revolution pushed people to towns and cities for work and there they had to rely on shops for food.
Social historian Juliet Gardiner told the BBC: “It was in the 1860s and 70s that the High Street as we know it came about. Because of urbanisation, people no longer had the facilities to grow food themselves or keep livestock. It was then that market stalls became shops, with fixed prices, customer service and home deliveries to entice people in.”
The golden age of the High Street was the 1960s, Gardiner says, when Brits were relatively well-off and mass production pushed the price of goods down. London’s swinging 60s were defined as much by Carnaby Street, where the young bought their trendy clothes, as by the capital’s music scene.
Over the years the High Street has had many ups and downs, usually in line with the economy, and the current downturn began with the financial crisis.
“The decline happened quite rapidly once the recession hit in 2009,” says Diane Wehrle, marketing and insights director at retail consultancy Springboard. Springboard’s data shows that High Street footfall — the number of people visiting — declined by 2.2% between 2008 and 2015, as people cut their spending in a struggling economy.
But High Streets have struggled to recover in line with the economy. Today, retailers face an assault on multiple fronts: National Living Wages and spiralling property prices are pushing up the cost of stores, while the collapse in pound post-Brexit is pushing up the cost of many items, and slowing consumer spending.
‘There have been some big casualties and inevitably there’ll be one or two more’
Still, the biggest challenge remains the shift to digital. Brits who are shopping are increasingly doing it online. The UK Cards Association declared earlier this year that Brits spend more online than any other nation in the world, equivalent to $US5,900 (£4,611) per person each year.
Commenting on Thursday’s ONS retail sales figures, PwC’s retail director Kien Tan said: “It seems Britons still can’t get enough of online shopping, with non-store sales up over 15% year-on-year.”
“People can shop for furniture from their living room, order a new pair of work shoes from the office, or order another pack of razors the moment they run out,” said Michele Chang-McGrath, a partner at consultancy ReD Associates, which has just done an extensive study on the changing nature of shopping. “When access to goods becomes so effortless, what drives customers to invest time and effort in ‘going shopping’?”
High Street-focused retailers BHS, Jaeger, and Austin Reed have all gone bust in the last year, leaving empty shops on streets up and down the country. A failure to invest in digital has been blamed for their collapse.
Even Next, once a High Street stalwart, is in trouble. The retailer began the year with a profit warning and analysts at Berenberg this month downgraded the company “Sell”, saying: “We believe Next is burdened by its overspaced store estate, which restricts its ability to invest in areas that matter most to the consumer — product and free home delivery, leading to market share erosion.”
Analysts at the bank even went so far as to say: “We believe there are significant similarities between Kodak’s history and Next’s current predicament.” Kodak, the camera giant that went bust, is a byword for businesses that fail to see the wind changing direction and suffer the consequences.
Jason Shorrock, who works for JDA Software, which provides supply chain software to over 70 of the world’s top 100 retailers, says: “There have been some big casualties in this reshaping of the High Street and inevitably there’ll be one or two more.”
It’s not just High Street retailers who are facing difficult adjustments. Wehrle says: “Banks, building societies, travel agents, now even estate agents — a lot of that has been transferred onto the internet and that will inevitably create change on the High Street.
“Those units will shut and in some High Streets, they will remain vacant. Some High Streets will contract in size.”
‘We’re going to see these collaborations’
“Do I think the High Street is dead? Absolutely not, I’m afraid,” says Shorrock. “Five years ago everyone was saying online is going to continue its march forever and the high street is going to just die. What’s happened is it’s moved on and the picture has refined quite considerably.
“While online continues to grow, consumers are refining what they think is a good shopping experience. They’re re-thinking how they want to use the different channels to shop. Sometimes they want to do it online and sometimes they want to do it in a physical store. We see the store changing itself and adjusting itself.”
Wehrle argues that High Streets will become more of a leisure destination than a shopping location, with restaurants, cafes, and other “experience”-based storefronts booming.
“There’ll be more coffee available in a fashion shop than there is now,” she says. “There may be work areas, because we’re increasingly working at home and having pods or workstations on the High Street could be an opportunity for some retailers. We’re going to see these collaborations.”
Tesco has begun putting Harris + Hoole coffee shops into its bigger stores to combat the decline of the weekly big shop. Similarly, Sainsbury’s bought catalogue retailer Argos and has begun putting concessions in its stores to give people another reason to pop in.
ReD’s Chang-McGrath says: “A popular narrative has emerged among such retailers that physical stores must become ‘attractions’, luring in consumers with the promise of spectacle or just pure entertainment.
“Walk down Oxford Street for example, and witness the birth of the ‘Shop DJ’ — soundtracking your journey to the trainer aisle as if you were edging towards the bar in a crowded nightclub.”
‘Retailers will be looking at their estate and saying: do we need as many stores?’
However, all agree that this transformation will most-likely mean fewer shops in some places.
“It’s going through a process of change,” says Wehrle. “That ultimately requires some contraction in certain areas.”
Shorrocks says: “Some retailers will work out that they cannot afford to have 500 stores across the UK — that’s too many. So they will work out, where are the right places to have our 200 stores across the UK?”
Marks & Spencer, long a stalwart of the British High Street, announced earlier this year that one in four of its 300 clothing stores will be shut down, relocated, or remodelled to remove excess space.
Wehrle adds: “Bricks and mortar retailers will be looking critically at their estate and saying: do we need as many stores? There are some stores that are not appropriate to current consumer demands. Maybe it’s too small, maybe the High Street’s declining and it’s one of those that won’t recover.”
The danger is that this rebalancing leaves more down-at-heel areas of the country desolate as retailers favour having shops in only affluent neighbourhoods. This great remaking of the British High Street could become yet another story of North-South wealth divide in the UK.
“From our perspective, there are parts of the country that are being left behind,” Joseph Rowntree Foundation CEO Robb Campbell told the BRC Retail2020 conference in London earlier this year. “What is the responsibility of big retailers, who are anchor institutions in these places, forming new communities?”
Wehrle is optimistic. She says: “What we’re seeing is a revolution really and a change, rather than a death. I would expect to see that quite a lot of High Streets will start to change and renew and become quite lively, but quite different places. They won’t wholly be retail locations, they will be more leisure based locations.
“It would be obvious to say, ‘Oh yes, it’s been the death of that High Street.’ What we’re seeing is a part of a process. Over the last couple of years what we’ve seen is the leisure based trip to retail destinations and the growth of the hospitality sector. We’ve seen huge surges in coffee shops and restaurants and bars. All of that has breathed life into some — not all — of our High Streets.”
Springboard’s own footfall statistics show that visits to the High Street increased by 0.8% in the first half of the year — not a huge increase, but a start.
Still, while Wehrle is optimistic, ReD’s Chang-McGrath believes that the rise of online shopping means the High Street will never occupy quite the same central part of Britain’s psyche as it once did. She says: “The future of the High Street will lie in playing a special supporting role rather than being the main attraction in shopper’s lives.”
A nation of shoppers still, but shopkeepers not so much.
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