2020 had a decimating effect on the UK’s high streets, however, this downward trend is something that had set in long before COVID found its ways on to our shores.
The high street, and retail in general, was and is going through significant structural change, with a combination of increased online sales, a lack of new operators requiring physical space and consumers wanting new choice and experience in equal measure. The impact of COVID has pressed fast forward on the inevitable change expected and a five to 10 years process has been pressed upon us in the space of months, forcing local authorities, landlords and operators to react immediately.
Savills’ research believes that these headwinds could mean that a third of retail could be redundant by the end of the decade if no one acts now.
However, there is hope.
This last year has reaffirmed the importance of community. Alongside our collective need to socialise with others, there has been an increase in localism and supporting independent retailers. This throws up an opportunity for the high street to evolve into something fit for purpose for today’s consumer.
People want to go to the local high street for an experience and shops alone can’t do this.
It will take collaboration between public and private sectors to create high streets that meet consumers essential needs and social desires.
What could the solution be?
Local communities need to be the focus of all rejuvenation projects. Whether that’s retail, leisure, experience or residential, solutions-focused around serving the needs of the community it sits within need to be front and centre of any high street revival plans.
The Future High Street Fund gives smaller developers the opportunity to take advantage of Government-backed funding. But taking this concept a step further, another solution could be the creation of inner-city funds that invests in all asset classes in town centres: retail, leisure, community, residential and alternatives. This would truly create a holistic approach from investors which would benefit the consumer and drive stable continued demand for space.
The residential sector will also play a key part in any revival.
In the five years to 2020, over 36,000 new homes were built in the heart of towns and cities, a further 68,000 are in construction and a further 173,000 are in planning. Great examples of this can be found in St Albans where two mixed-use schemes comprising of residential, leisure and community services have just been approved on the main high street.
Many schemes are within the build-to-rent sector, especially in well-established university towns. There will always be demand from graduates wanting to live in city centres.
There is also a significant drive and demand from the later-living sector to grow their inner-city portfolios. An increase of upwardly mobile retirees wanting to enjoy the experience of a city; meals out, culture and retail, whilst being close to transport links. Legal and General backed Guild Living, Goldman Sachs backed Riverstone and Audley are key players in this Urban Later Living sector.
On the flip side, some local authorities are failing to recognise the benefits of these developments and the positive economic impacts the ‘grey pound’ would have on our high streets. With 25% of older people wanting to downsize, fit-for-purpose later living hubs can also help free up part of the housing market and support the wider housing crisis.
There is a sense of optimism around what the high street could be, but there’s a long way to go before it returns to the buzzing hub it once was. As with many things in life, evolution will be required in order to keep the high street alive.
Guy Garnett is a consultant within the Executive Search division of NSCG. If you would like to speak to someone about deliver successful change or transformation in your organisation, please get in touch.