Commercial news: Recovery of Town Centre Shopping

The UK’s high streets have suffered in recent years, with falling demand and switches to digital shopping and banking, for example, forcing plentiful closures. However, Chris Dixon, youngsRPS business development consultant, says hope is not lost, with a blueprint from ex-Chancellor Rishi Sunak providing a potential route to fresh prosperity.

In his leadership campaign to become Prime Minister the former Chancellor, promised to take action to “slash” the number of empty shops in our towns and cities by 2025. He also wants to reverse the closure of 500 bank branches.  At present it is estimated that there are currently 58,000 empty retail properties in the UK. The vacancy rate represents 14% of the total stock.

The actions he proposed to reduce the vacancy rate include increasing Police powers to tackle anti-social behaviour, allowing Local Authorities to double fines for littering and graffiti and relaxing rules to encourage more farmer’s markets in town centres. His aim is to create “thriving local assets” that support business services and employment. Other ideas involve locating Police Stations, Jobcentres and NHS Diagnostic hubs into town centres to increase employment and provide services.

In order to formulate a constructive policy, it is necessary to understand why there are 58,000 empty shops in the UK. Whilst there are many reasons there has been two principal factors for this. In recent years shopping habits have changed with consumers buying more on-line rather than visiting physical shops. This trend was exacerbated by the Covid pandemic with shops forced to close for long-periods and potential customers restricted from shopping and visiting town centres. These restrictions led to a fall in demand for goods and services in physical shops leading to closures.

The main thrust of Mr Sunak’s proposals is to create a more pleasant environment in which to shop with less litter, graffiti and social problems deterring shoppers. This coupled with locating NHS hubs and other services into town centres will increase potential customers stimulating demand. That in-turn should lead to shops opening in these areas to meet the demand. An example of a better environment helping to let a vacant shop is one we recently handled in the Market Place in Morpeth. The new shop has added to the local retail offer and led to capital investment in the property.

The question that should be asked is whether these proposals will halt and reverse the decline of retail that has been experienced in our towns and cities.  In our view these proposals are limited and need to go further to lead to a broad recovery throughout our towns. Other proposals include The Retail Jobs Alliance seeking a cut in business rates to reduce retailers’ costs as a way of helping the sector. However, it should be borne in mind that a lot of small retailers are already exempt from paying business rates. We consider that a relaxation in parking charges coupled with measures to make parking easier would encourage people to visit towns and shop.

An improved environment as proposed by Mr Sunak may also encourage more people to live in the towns taking advantage of easy access to local services and shopping. This initiative could be strengthened by building more houses / apartments in the centre of towns or achieved by allowing existing buildings to be converted to residential use. Retail property and other un-used buildings that are unlikely to be used again could be demolished and replaced with new housing or to provide green space. The result would be a higher local population using local services and shops.

 Another area worth consideration is a relaxation of, or even abolition of the Use Classes Order that would allow property to be used for any purpose. The effect would be to allow the market to determine what a particular property should be used for. An empty shop could continue being used as any type of shop or it may revert to a residential, office or workshop use. This may lead to a change in the businesses on the high street but should increase demand reducing empty properties.

The UK experienced shop closures following the financial crisis in 2008 but not to the extent we have now. Interestingly demand for small shops then rose as people sought other employment opportunities. This trend has started to occur again, particularly in affluent suburban areas. The proposals by Mr Sunak will help our towns to recover but, as always , more requires to be done.

Overall, as a society we have to use our shops, or we will lose them. Our towns and way of life will be poorer if we do.

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Notes: This article first appeared in the September issue of North East Times Magazine and prior to culmination of the Conservative Party leadership battle.