Is it time to let the high street go?
The UK’s lockdown is set to be eased, but many high street businesses are fearful for their future, even after they reopen. Given the weakness of so many high street retailers, now is a good time to reconsider the high street in its entirety.
The Covid-19 lockdown has seen high street retailers return their worst results on record, especially clothing shops. Some sellers have ‘quit’ the high street, closing all their shops while the lockdown has led to an 83% drop in shopper visits to bricks-and-mortar stores.
But it is not just the lockdown. In the three weeks before the lockdown, footfall was already down nearly 20 per cent on the year before. Well known high street brands have been struggling for a long time, but are now faced with no longer enjoying easy access to stock or supplies.
Some of the best known high street names are closing branches or even going into administration including Debenhams, House of Fraser, and the Arcadia group. Those that remain on the high street are struggling to pay their rent or are close to defaulting on their debts. There are legal cases incoming over whether to seek administration or offer rent holidays. There must be questions as to whether shops, such as department stores, are viable in the future given the high cost in rent and business rates.
The high street is a relic of a bygone age. Covid-19 has exacerbated long standing structural weaknesses it faced. Longer term factors such as more women working, changing working hours and increases in car ownership have been exacerbated by more recent factors such as out of town shopping. And the internet has changed everything — online sales have nearly doubled in the last five years. These have all served to change the ways in which people shop.
Yet there remains a sentimental and practical attachment to the high street. On one hand is the history of the old department stores and family businesses. On the other hand is the usefulness of being able to walk, cycle or take a bus to a shopping hub where a person can go into a shop, look at things, try them out, feel them and walk out then and there. All things not possible on the internet.
The tide cannot be held back. Rather than seeking to restore a former time, why not allow the high street to adapt to the new age, by letting it go?
Take, for example, Southend high street. The place is in a terrible state. It has been called ‘old and tired’ by a planning expert. Shops are boarded up, many properties are empty, the only settled inhabitants seem to be homeless people begging for money.
There is a ray of light, however. I have certainly done my bit to support local beer sellers, and I am not alone in using the internet to find and buy from local businesses. Some are predicting a boost when shopping becomes viable again, but will it be any more than a short term bounce, a retail ‘sugar high’?
The long-term impact of Covid-19 on the way that we shop is highly uncertain, and it seems churlish to even think about it when the priority is keeping people alive. But the issue isn’t going away.
Given how many businesses have been impacted by Covid-19, and how much our shopping habits or supply chains may change, why not change the reason for the high street? Why not make the high street a centre of housing? Southend is showing the way to use things differently, with charities taking over old department stores and plans afoot to diversify the high street there. Change is already underway across the country, as high streets have seen higher recent population growth than other places. Between 2012 and 2017, high street areas saw 6% population growth, compared with 3% in non-high street areas.
My beloved Southend United have done the opposite with their new stadium, which will be surrounded by housing, rather than retail as previously imagined. In part this is because the council is under pressure to protect the high street. But is that right?
The high street doesn’t just matter because of the shops, it also plays a role in funding councils. This is something that is going to matter more in the future because the longstanding pressure on social care has become more visible due to Covid-19. Councils fund social care through council tax and business rates, which has been a large but invisible problem in the past. The issue is compounded by the fact that those areas with the greatest need are those with the lowest yield from available sources of revenue.
Those who blame rents and rates for the poor state of the high street may not be wrong, but councils rely on that income, though they have limited say over the rates.
Current funding of local councils is unsustainable but reform of council funding has been kicked into the long grass for too long. Some in government have previously talked about looking at how local government is funded, but nothing has come of it (though I accept they have been a bit busy). Those who know this area well know that council tax and business rates are terrible taxes, regressive and poorly targeted, but politicians have yet to embrace alternatives such as land value taxation.
Not all the proposed reforms are necessarily positive though. At the moment fiscal devolution looks a long way off, and that may be a good thing because it would need to be accompanied with much larger reforms so that poorer places don’t lose out. Already the areas with the greatest needs are those least able to raise the money they need and fiscal devolution could make it worse.
But changing the purpose of the high street to housing could be an enormous boost to the councils under which these high streets sit. It would take much-needed reform of the ways in which local government is funded, but it could work. The essential problem is that the high street evolved to serve a purpose it can no longer meet. The world has changed. The best way to reinvigorate highstreets like Southend, or town centres like Basildon, could be to turn them into housing. That would enormously boost economic activity by having people live there, the shops around would be boosted by being in proximity to a larger population who might make far more use of convenience shops, cafes and boutique establishments around them than the current pound shops and pawnshops.
Maybe the best way to revive the high street is to allow it to die and be reborn. As the owner of one family department store says “what we need to do is to get reasons for the public to come back into the High Street. It won’t principally be driven by shopping”
