How the UK’s retail crisis could lead to the demise of our town centres
— 8 Dec 2020, 13:00 by Roger Wade
Last week marked the end of shopping restrictions as retail returns across the country. But sadly, the second lockdown did more damage than we ever expected and high street retailers suffered a double-blow with not only the pandemic, but competition with online stores too.
Earlier this week, the UK retail industry suffered one of the harshest blows yet as two of the country’s best-known retailers collapsed, putting 25,000 jobs at risk in less than 24 hours.
This is going to hit everyone hard, and it’s the final nail in the coffin for the high street….
A delicate ecosystem
But I wonder if we have really considered the long-term impact this will have on our high streets which form the lifeblood of our community. This goes beyond the demise of retail; it has a detrimental knock-on effect on hospitality, leisure, offices and homes too. Not only does it affect residents who depend on buying from their local shops, but part of the physical retail experience includes stopping off somewhere for a bite to eat and so hospitality operators will suffer from the lack of footfall which is largely driven by retail.
Without physical retail in our town centres, the value of local commercial and residential properties drop making it a less attractive place for tourists, businesses and home-buyers.
Five years ago, the MP of Ipswich invited me to go and look at the town centre which was really dying out at the time. Retailers were struggling because a brand new shopping centre was built down the road in King’s Lynn - so nobody came shopping in Ipswich, they went to King’s Lynn instead. People stopped visiting the town centre in Ipswich and consequently, the demand for residential and commercial properties fell drastically.
People need to realise that our town centres are a delicate ecosystem - and the absence of retail on the high street would destroy it. The pandemic, rising rents and business rates, plus a shift to e-commerce has put a huge amount of pressure on the high street and it is imperative that measures are put in place to help businesses adapt to those changes.
Urgent action is needed
We need to take urgent, prompt action.
The first and most important step is to level the playing field when it comes to online retailers and physical, high street stores. Independents can’t possibly compete among the e-commerce retail giants like Amazon because they are encumbered with increasing business rates that might be effectively 40% of its rent. We need the Government to reevaluate business rates to help level the playing field.
Secondly, landlords and tenants need to get together and find a way to share the pain of rent. I think the hospitality and retail industries should shift towards turnover-based rent where landlords actually take a stake in their tenants’ business, because upward-only rent just isn’t feasible in the current economic climate. We are offering turnover rent to our tenants at BOXPARK to help them better manage the costs of staying open and trading.
The Government needs to seriously take into consideration the hundreds of thousands of jobs at risk and what support they can offer to retail employees made redundant.
Death of the high street
Years ago, people were predicting the death of the high street but I don’t buy into this idea. And I don’t believe that the future is all online shopping either. I believe that physical retail will never die out, it will keep evolving. In fact, independent retailers have been a crucial element in the survival of Britain’s high streets - in a world where you can now buy everything online from large chain stores, independent retailers fill in the gaps by offering unique, artisan products and a more personalised experience for consumers.
We can already see evidence of how independents have helped to transform high streets in more successful town centres that are mainly populated by independent businesses. Furthermore, major technology companies such as Apple and Tesla are investing in physical retail to showcase their products, which demonstrates the power of physical touch and experience. With soaring overheads for high street retailers including the cost of a lease, rent and business rates, the most compelling reason to have a physical presence is all about the people and local communities.
If we don’t have places where people can come together, what sort of future town centres do we really have? High streets serve as the heart of local communities and it is a place that people depend on for their social lives, employment and livelihoods - we must do everything we can to save it.