As many as 70,000 UK high street jobs could disappear this year and the number of empty shops could rise to 100,000 in the next decade. These are some of the stark findings of a major new report into the state of Britain’s high streets, led by retail expert Bill Grimsey.
The fact that the country’s high streets are in a state of disrepair is not new. There were 5,855 store closures in 2017, more than in any year since 2010. Already, this year, a large number of retailers across the country have announced closures, including Toys R Us, Carpetright, Marks & Spencer, Mothercare, House of Fraser, New Look, Poundworld and Homebase.
Indeed, a lot of the problems had already been highlighted in a major independent review of 2013 (also led by Grimsey). It offered 31 recommendations as an alternative vision for the future of town centres. It also sought to broaden the concept of the high street, identifying the need to embrace technology and reinvent it as a community hub with a combination of goods and services.
Though many felt that the review had thoroughly considered the future of retailing, the recommendations were largely ignored by government – which must take the lead in helping high streets survive. Five years later and the challenges facing town centres and high streets have intensified.
Reviewing business rates
Building on the first review, the latest report identifies a number of ways that the government can help matters. One of the most important recommendations from 2013 concerned a freeze in business rates. But the government pressed on with its 2017 revaluation of rates, which handed retailers huge bill increases in parts of the country where property prices have surged. The worst affected is the coastal town of Southwold in Sussex, where the town’s 79 shops faced a a rate value rise of 152%.
This led to campaigns by major newspapers, such as the Daily Mail, to “Save the High Street” and reform “sky-high business rates”. The paper estimates the overall business rates burden for retailers will increase to £30.8 billion in 2018, up from £29.6 billion last year.
Another issue to tackle is the uneven playing field between high street and online retailers. Data from the Centre for Retail Research suggests the average high street shop spends 2.3% of its turnover on business rates, while online firms pay just 0.6%. The British Retail Consortium has argued that “retailers alone shoulder over a quarter of the total business rates burden annually” and that policymakers must create a modern business taxation system fit for the 21st century, which reduces the burden on the high street.
Strengthening local leaders
The latest Grimsey Review goes further by arguing for greater devolution and stronger local leadership to give high streets a renewed sense of purpose and identity. It proposes that local authorities be given more powers, including final say over planning permission to prevent the practice of land banking – where investors buy undeveloped land, with a view to selling it on at a profit when it has been approved for development – and to encourage landlords to fill empty shops.
As well as repeating calls from five years ago for a complete rethink of the business rates system, the latest report also called for the creation of local town centre commissions that draw up their own 20-year strategy for their local high streets. It also highlighted the need for smaller towns to accelerate their ongoing digital transformation by connecting the benefits of online services with real life ones. To make things easier for shoppers, it suggests the creation of a nominal maximum charge of £1 for the first two hours of parking in town centres, while introducing 30 minutes free parking in high streets.
This time it’s more likely the government will take notice – given that in early May the Housing, Communities and Local Government Committee announced an inquiry into the state of England’s high streets and town centres in 2030. It will examine the future role of the high street in contributing to the local economy and the health, cohesion and cultural life of the local community, as well as the challenges faced amid changing demographic, technological and other trends in recent decades.
It’s also evident that the vitality of the high street matters to the public. A survey of 300,000 people by retail technology platform Maybe, published this month, found that 78% worry about their high street and 70% are concerned about shops closing. So, the latest Grimsey report arrives at a timely moment as an independent source of evidence and advice as to how the change should be managed.