High street evolution led by food, drink, health and beauty

New Ordnance Survey Data shows High Street continuing to evolve with more food, drink, health and beauty; but with less department and fashion shops.

In early December, BBC News released its analysis of two years of British high street data, from the Ordnance Survey. Covering the period March 2020 to March 2022 the stats paint an exclusive (but predictable) picture of the changes to British high streets since the start of the pandemic.

• In March 2022 there were 9,300 fewer retail shops in Great Britain, a drop of 3% from March 2020 before the pandemic. There was an 8.5% decline in the number of clothes/shoe/fashion shops
• There were 328 fewer department stores, a 13% drop.
• Nightclubs have seen a major drop, with 9% fewer than in March 2020.
• Banks – a fallen victim to changing habits (which predates the pandemic) – 800 fewer today than before Covid.
• Across Great Britain, there was a 5.7% increase in the number of cafes between March 2020 and March 2022 (also includes snack bars and tea rooms).
• Hair and beauty services have seen a 5.9% increase.
• Tattoo and piercing studios recorded a rise of 8.2%.
• A 7.2% increase in the number of fast-food shops (these include fast food and takeaway outlets, fast food delivery services, fish and chip shops).
• Eating and drinking establishments on the whole have seen a 3.8% rise

Source : Ordnance Survey and BBC News.

Professor Cathy Parker and Dr Steve Millington took to the BBC airways to comment on the figures, for Radio 4’s Today programme, You and Yours, BBC Manchester, BBC CWR, and BBC Berkshire.

Over-expansion of chain stores

Overall, the new figures do provide more evidence for the general trends that were shaping high streets before the pandemic. For example, according to Ordnance Survey data, in 2019, the year before the pandemic, there was a net loss of 1% of high street shops. However, in the five years before that, the net loss was 2%.

So, the rate of decline for retail was accelerating even before the pandemic. Also, the type of businesses that closed over COVID, in the main, reflect those shops that were closing before the pandemic, like chain stores and department stores like Debenhams – who were going bust anyway.

As Cathy, Steve and others have explained, too many chain stores over-expanded. Many were saddled with unserviceable debt and didn’t adapt to changing consumer behaviour, like online shopping. They also didn’t do enough to improve local trading conditions, by working with their Business Improvement Districts, local councils, and other place partnerships on local regeneration and revitalisation plans that encourage people to shop in town.

So, in short, this new BBC analysis is in line with a relatively small but steady decline in shops selling footwear and clothing, as more people buy online. Internet sales peaked at 37.8 in Jan 2021 during the second full lockdown – in October this year they had fallen back to 26% - but that is 5% higher than in October 2019, before COVID.

Barriers to entry

There is no doubt more people shop on line, especially for the type of goods they would have bought from chain and department stores – like clothes, electrical items, furniture and bedding etc. but also reflect an increase in food and drink, health and beauty and leisure operators both of which have been the general trends for the last 10 years or so. The barriers to entry for these types of businesses are relatively low, you don’t need a huge amount of equipment, or buy large quantities of expensive stock. Also, rents have fallen dramatically, in some places more than half, and terms for occupiers have improved. The 25-year lease is a thing of the past. Small, independent businesses can actually afford high street premises on realistic, shorter leases.

Cathy and Steve did find some evidence of a COVID effect in the data, suggesting that there have been three years’ worth of shop closures in just two years. By their estimates that’s at least 3,000 shops that may have closed as a result of the lockdowns and the other unprecedented disruptions to trading.

The loss of 150 nightclubs is another COVID effect. Nightclubs were locked down the longest and according to High Street Task Force analysis of Springboard footfall data there has been a 6% shift in footfall away from the night-time economy. So, less people are visiting towns and cities at night, meaning less customers for night clubs and music venues. This is a real concern to IPM, as often these are the sort of establishments that give places identity and are really important for local culture, and the night time economy, especially in smaller towns.

Whilst this story focussed on the period March 2020 to March 2022, Cathy and Steve were predicting more closures in the New Year, as a lot of high street business will be clinging on to try and have a good festive period – but the disruption caused by COVID means they have depleted their financial reserves, they may be paying back loans and rent arrears – add in the increased cost of energy, supplies, labour coupled with the drop in consumer confidence and spending, then the next 12 months look more concerning to the high street than anything they have seen so far.

Search your postcode

As usual there was the normal concern about the rise in takeaways and nail bars, but as the analysis was undertaken at the national level – it doesn’t mean every high street will have more. The BBC have developed a postcode widget that allows you to look up the changes on your nearest high streets. Although the government recently relaxed planning law in town centres, operators still need permission to convert a shop to a takeaway, but it’s much easier to swap between shops, offices, cafes, restaurants, surgeries, gyms, other health and leisure etc. as they are all in the same use class.

Place management and partnerships

Apart from using planning rules, most towns don’t attempt to actively manage their high street offer, in the way shopping centres do, despite the offer being the second most important factor affecting the success of a high street. The IPM has lots of examples of BIDs, local authorities and place partnerships that are doing this, but they are still the minority. There are still not enough place managers or town centre partnerships working with landlords and businesses to ensure the town offers the shops and services the catchment want and will patronise.

About the author

https://placemanagement.org/about/

Cathy is Professor of Retail and Marketing Enterprise at Manchester Metropolitan University, Co-Chair of IPM and Research Lead for the Government's High Streets Task Force.