Difficult and challenging times for the High Street do not even touch the surface! What we should ask is what’s next for our dying High Streets?
Walking down the main streets of a couple of cities recently, I observed the same thing in common. The once bustling pavements, which were packed with busy customers, are now literally just an empty channel with the means of getting from A to B.
Pedestrians dodge lamp posts and give full rubbish bins a wide berth whilst staring at their screens. How do we raise the gaze from the screen back to the shop window?
What’s next for our dying High Streets?
It’s a pretty sad sight to see property after property closed or so run down that they are no longer inviting enough to step into.
But there’s no news here…
“What’s next for the High Street? Blah, blah, blah!”
We’ve been talking about this for ages and unfortunately, the High Street was already on life support pre-COVID.
But my thoughts really do move to what’s next – what does tomorrow look like? Where does the High Street go next?
High Street killers
The High Street has suffered a long, slow demise and whilst we can blame online shopping and mobile technology, the final nail in the coffin was the pandemic.
Now, with rising inflation rates, the economy is just not in a good place to support a post-pandemic revival. According to the British Chamber of Commerce we are heading into a recession by the end of 2022.
Energy prices, business rates and insurance premiums are soaring. Pile on top of that the increasing costs of raw materials, imported goods and services and supply chain issues – it’s a bleak outlook.
Finding the right people is a challenge too. You need good quality, trustworthy staff to work in the store, who are flexible enough to work the hours you want. Not to mention the good tradesmen you need to refurbish or spruce up a rundown establishment – they just aren’t available.
Then there’s the major problem of customer apathy. People don’t want to make a trip to their local ghost town to visit the one remaining store that hasn’t closed yet.
Why should they spend the money on petrol and parking, especially while fuel remains expensive? Why step outside of the home when you can do it all online from the comfort of your sofa?
Face to face
Our dying High Streets need a reason for people to come back. They need to find a way to engage people and create that all-important footfall again. Improved public transport can play a role here but you need to provide a motive for people to use it.
Perhaps the focus should be on providing services that can’t be done online. Physical services and face-to-face transactions.
You can’t get a haircut online, unless it’s a virtual one in the metaverse, and frankly if you’re actually planning to step outside your front door what is the point in that?
There is also a demographic out there that wants face-to-face because they struggle with shopping and banking online. These are the people who reject self-service machines and prefer to wait in line to be served by real people.
It’s often the social aspect – talking to a real person in a shop may be the only communication an older adult has all day. These social interactions support their desire for independence and help to keep them active. Shopping is not viewed as a chore or inconvenience but an enjoyable social experience.
The 2019 National Travel Survey reported that in England 32% of all trips by people aged 60+ were for shopping, which was more than double the second purpose of travel category (personal business at 14%).
Show me the money
Then there are people who are very much pro using cash. Not everyone wants to use cards – some people still want to only handle cash because they can feel it and smell it.
The cost-of-living crisis is starting to bite and people are prioritising what they spend money on. For some people using cash versus credit helps them to budget. If they haven’t physically got it in their hands, then they can’t spend it. Credit can be dangerous in the wrong hands and create unmanageable debt at the flick of a wrist or a casual swipe.
Proving the point that cash is still relevant is the successful pilot of BankHUB. These new centres provide Post Office services and banking transactions from four of the major banks, in small, rural towns that no longer have any bank presence or ATMs available.
Set up by the Access to Cash Action Group and Link, the ATM network, their primary aim is to ensure financial inclusion and keep cash flowing in the community.
Government legislation aims to protect our use of cash and ensure everyone has fair access to obtain it and the ability to spend it. There are now plans to build more BankHUB branches with announcements of 26 locations across the UK.
The good news is that BankHUBs not only serve cash lovers but acts as a frequently visited hub for local people. They have the potential to hold communities together. These facilities could be a lifeline for bringing the footfall that other retailers so desperately need.
If we look beyond the physical services to other retailers, then they need to make everything much easier for the customer.
They need to make people aware of their presence and reviews/ratings via digital search and their customer experience needs to be seamless between their digital and physical location – WIFI needs to be everywhere.
They need to provide much better incentives for people to go to their physical location instead of choosing a delivery.
If the cost to collect from a store is not much less than a delivery to your door, then there’s not much incentive to go to the store is there?
But there is an opportunity here because people do want to reconnect after Covid. They want to be together – to enjoy experiences and have fun. People want to travel again and explore – surely more opportunities for Tourism now?
We want all that plus the convenience of purchasing what we want when we want to suit our daily needs, for a special occasion/event or just pure entertainment.
What would you do?
Moving beyond the challenges, what would you do next?
If you have multiple stores, do you close down or mothball loss-making stores whilst we step through the energy cost challenges?
I wonder what Sir Malcom Walker, founder and executive chairman of Iceland will do, considering the energy crisis?
Do you negotiate the best possible deal you can, short-term lease and invest? If the footfall is there will it maintain and if it will, is now the time to invest anyway?
If you had the choice, where would you put your money?
- Coffee shop/meeting hub
- Coffee shop/shop (e.g. everything is for sale – space optimisation)
- Clothing store
- Greeting cards shop
- Health and beauty
- Pop Up shop (Seasonal only)
Would you head to Planning for a Change of Use to residential? Whatever the opportunity it feels a short-term punt and long-term leases could struggle.
Who’s going to be hit hardest in the current conditions and the question I ask you is – would you even dare to invest?
There is no doubt that with the energy price hike there is much more risk to running a premises. High energy consumption outfits such as freezer stores, takeaways, restaurants, pubs and spas gobble up energy and are a huge risk. Not helped by even the prospect of generating your own energy via solar as business units struggle with planning and space restrictions.
Perhaps we need a tear-down of the bureaucracy and rules surrounding these commercial properties.
Is residential the answer? Empty properties could be the answer to help fill the housing shortage void, but also provide that all-important footfall that is the fuel for the shops nearby and within walking distance. Having an embedded residential community would help to keep some businesses viable – such as gyms, theatres, cinemas, hair salons, barbers, restaurants and cafes.
The ability to convert and reconfigure commercial properties to residential is on the Government’s agenda and Permitted Development rights have been amended to make conversions easier, but is it enough?
As of the 1st Sep 2022, the Use Classes for commercial properties changed to a broader Class E to allow more flexibility for a property to switch between being used for retail, or as restaurants, cafes, offices, gyms or health centres. Whether or not that is enough to encourage developers remains to be seen.
Years of DWG Retail experiences tell us there will always be opportunities and with any dramatic shift in market and economic conditions there will be winners and losers. I believe though that customers will be there and will engage IF the dead space is filled with the right proposition.
In the short term, the seasonal period is still to come but we must plan now for beyond the short term.
What do the next 6-12 months look like for the High Street and how do we fill those blanked-out windows with what customers want right now/tomorrow?
Where do you put your money? I’d love to hear your thoughts.