Headlines

Monday 8th November, 2021
Friday 13th November, 2020
Wednesday 11th November, 2020
Wednesday 17th June, 2020
Monday 1st June, 2020
Tuesday 26th May, 2020
Thursday 14th May, 2020

Crisis upon Crisis on the High Street

Thursday 14th May, 2020

First published in Building Design, URBED's David Rudlin talks about the struggles that High Streets face during these testing times.

 

It was only two weeks ago that my son Luca, a freelance video maker came back from a meeting with a group of Manchester bar owners reporting that some were in tears. It was the day after the government had told us not to go to bars and restaurants but had not yet told them to close. Sitting in an empty bar on St. Patrick’s Day they were in despair, what should they do with their staff, how to pay their suppliers, cover their rent and repay their borrowing? It seemed that the whole sector was on the verge of being wiped-out.

They are not alone of course, town and city centres and high streets across the country are populated with low margin, cashflow-dependent businesses such as these. The package of government measures and the scheme to furlong staff on 80% salaries will be a massive help, but it is far from clear that it will be enough to save the high street which was already in a severely weakened state.

I have been using the time won back from my cancelled meetings to catch up on my reading about town centres as part of the 1851 Built Environment Fellowship. I have been reading about the 30,000 shop units that closed in the last two years and the 2,750 retail jobs lost every week last year (140,000 in total). However while this undoubtedly is a crisis, the picture is more complex that many of the headlines suggest.

Back in 1950 there were 120,000 independent butchers, bakers, greengrocers and fishmongers in England (figures on candlestick makers are not available). Today there are just 30,000 and the supermarkets have taken an astonishing 97% of grocery sales (which in turn makes up half of all retail spending). The first crisis on the high street was the decimation of the independent retail sector that happened a long time ago in the 1970s and 80s.

The second crisis happened in the 1990s after Nicholas Ridley’s brief tenure as Secretary of State for the Environment during which he overruled restrictions on out-of-town retail development. Retail parks and mega malls changed the retail landscape and traditional town centres struggled, some entering a period of steep decline from they have never really recovered.

Then in the prosperous 2000s investment flooded into retailing and the large chains expanded hugely both out-of-town and in-town. The latter further squeezed-out independent retailers and lead to concerns about ‘Clone Town Britain’. This may not have been a crisis, but it lies at the heart of our current problems. Many retailers over-extended themselves, became lazy and complacent leaving the UK with twice the retail floor area per head of population as in Germany.  

Because of this the current crisis on the high street is largely about big retail. Certainly independent retailers have been caught in the fall-out, but it has been the big names who have struggled. Companies like Woolworths, The Arcadia Group, Mothercare and Debenhams that were slow to respond to the challenge of the on-line competition. In turn this has put pressure on landlords like Intu – owner of the Trafford Centre and Lakeside – that has seen its share price fall by 94% since November 2018 and has abandoned attempts to raise £1.3Bn in equity as it struggles under a mountain of debt. All of this predates the lockdown of our towns and city centres as part of the Covid-19 crisis and it goes without saying that this can only make matters immeasurably worse.

However my mind goes back to the bar owners of Manchester and the other independent retail and hospitality businesses that now face such an uncertain future. We hear a lot about the fact that pubs are closing at a rate nearly 40 a week, many of which are owned by big breweries. While this is terrible for sure, it is rarely linked to the growth of independent bars and craft breweries. The pub chains are being supplanted by the independents, reversing the trend that goes back to the 1950s. There were signs that something similar was happening on the high street, at least until Covid-19.

The rise of the independents was not a universal trend, it was a phenomena seen most strongly in the larger cities and more affluent neighbourhoods, but there are also good examples in northern industrial towns (see for example the wonderful work of the Doncopolitan). This is where urban economies come into their own, when they are strong, they are excellent at self-healing as new activities constantly emerge to fill vacancies (This doesn’t work in weaker economies where the problems on the high street are particularly acute). The worry however is that the Covid-19 shutdown will stop this process in its tracks. Many great businesses that were doing such valuable work to revive their high streets will not survive and the town and city centres that emerge could be very different to those we knew last month.

 

Related projects