A latest report by PwC stated that a net figure of 10,059 stores ( 17,219 closures, 7,160 opening) exited high streets, shopping centres and retail parks over the last year. Good news here is that this is the lowest number seen in two years, though the report also states that vacant units in town and city centres are no longer being replaced by other chains owing to a “continued shift” to retail parks.
Over the past two decades, high streets saw closure of many brick-and-mortar stores. Even household names such as Woolworths, Debenhams and Topshop have disappeared from the streets, spurted further due to the rise of e-commerce.
As chain retailers have reduced the size of their store portfolios, independent retailers were also seen seizing the opportunity to occupy the vacated space. Since the start of 2017, the number of chain stores across the country has decreased by 5.97 percent, while the number of independent stores has increased by 1.28 percent, says a Deloitte report.
Pandemic only accelerated the trend further. With forced temporary closures, travel restrictions and social distancing guidelines, stores were further affected badly, especially places like cafes, pubs, salons and other non-necessary places.
Although convenience stores remained largely unaffected during pandemic, closure in vicinity implies lower footfall in the whole area.
(Photo by TOLGA AKMEN/AFP via Getty Images)
Association of Convenience Stores (ACS) chief executive James Lowman feels that closure in general is not good for c-stores.
“Around 10 percent of convenience stores trade on high streets and town centres and these stores often rely on footfall from shoppers who are on a wider shopping journey.
“When neighbouring businesses close, this inevitably has an impact on the overall numbers visiting the area and can have a negative impact on the store while the site is empty,” Lowman told Asian Trader.
While the recent trend and figures seem to indicate that the high street has come to a dead end in the UK, the assertion is not completely true.
It was predicted that the Covid-19 might give a fatal blow to UK’s declining high streets, multiple reports now show that the pandemic actually proved to be an equaliser in many aspects.
What’s happening where
Stronger city centres with large catchment areas saw a comparatively huge drop in footfall during pandemic. High streets in affluent areas were the worst hit with London and Edinburgh losing nearly a year’s worth of sales.
As per figures from Cities Outlook 2022, places like Oxford, Newcastle or Cambridge which before Covid-19 had relatively low numbers of empty shops on their high streets saw more closures than cities like Blackpool, Bradford or Doncaster, where the increase in vacancy rates was much more muted.
At the same time, high streets in suburbs, towns and villages remain unaffected as compared to those in London.
Retailer Anbalagan Perumal, who runs Family Shopper in Colsterworth, about seven miles south of Grantham, revealed how none of the shops in his area closed business in the past couple of years.
“I did not see any shop closures here during the pandemic. It’s a small village anyway with a small high street and with hardly a few thousand people,” Perumal told Asian Trader.
“Time was indeed very tough during the pandemic but in this village, no business was closed down."
Photo by NIKLAS HALLE'N/AFP via Getty Images
Similar views were echoed by retailer Anil Patel who runs Costcutter store in Chislehurst, a suburban district of south-east London, England, in the London Borough of Bromley.
“There are only about ten shops on my high street here. I did not see any closure during recent years. Not even during pandemic,” Patel told Asian Trader, stating that it seems “all the businesses are working fine”.
Retailer Simon Dixon runs Premier Express convenience store in Lower Darwen village in Blackburn. Being located close to a small industrial and a housing estate, the store benefits from plenty of passing trade.
However, Dixon reported “neither any store closure nor any new openings” during the past couple of years in his market town high street.
Situation, however, was a bit different in Hackney in London. Retailer Ankit Kumar Patel, who has a Premier store in the area reveals how he witnessed multiple store closures on his high street.
“I saw a few shops closing down,” Patel told Asian Trader.
“The shops that were closed on my high street were a nail shop, a Chinese restaurant and a cafe. Closure of the nail shop was obvious as there was no business during lockdown.
“The cafe and the chinese restaurant closed as they could not provide outdoor seating arrangement. Their takeaway sales also were not that great so they had no option but to close down,” Patel said, adding that businesses are now back to normal.
Photo by MIGUEL MEDINA/AFP via Getty Images
Post-pandemic, shoppers are now returning to the physical stores.
“Businesses are now back to normal. The shops that were closed also opened up. When other businesses are open and performing well, it helps my store as well as the whole area as each shop brings more footfall,” he said.
What Future Beholds
Rejuvenation of high streets is very much on the cards due to rising footfall post-pandemic as well as government’s schemes.
High street stores have long complained that they pay business rates based on property values of bricks-and-mortar outlets, a system that favours companies trading on the internet and those with large out-of-town depots.
In an effort to give them a boost, the government is contemplating introducing an online sales tax.
The government has begun consultation in the matter and is inviting arguments for and against such a move, the Treasury said in a statement on Feb 25, adding that no decision has been made yet in this regard.
One percent online sales tax could raise one billion pounds which in turn would go toward funding business rates relief, said the government.
Stating that high streets have been facing challenges for several years now due to change in shopping habits and rise of e-commerce, ACS has been calling on the government to “rethink the way that business rates are levied on bricks and mortar stores”.
“One of the biggest changes that the government can make to support high street businesses is a rethink of the way that business rates are levied on bricks and mortar stores.
“The government is currently consulting on the introduction of an online sales levy for online businesses, which we have previously called for as part of a rebalancing of the rates system,” Lowman said, adding that convenience stores on high streets and in town centres pay “very high business rates bills”.
Expectations are also high from the government’s upcoming Levelling Up White Paper that is anticipated to shed light on what the road to high street recovery will look like and how policy can help town and city centres to adapt to the changes brought on by Covid-19.
Various efforts are also seen on local levels. Like, East Suffolk Council cabinet is set to establish free high street Wi-Fi in 11 ‘digital towns’ after a successful trial run in Framlingham.
Photo by Peter Macdiarmid/Getty Images
Meanwhile, basic infra issues like lack of parking space continues to be one of the major hiccups in high streets especially in busy cities, majorly due to lack of space.
Hackney-based retailer Patel pointed out that lack of parking space is a huge issue in his area. He has raised with local authorities too though he does not expect much respite simply because “there is no space”.
“In the morning and peak times, there is quite a lot of traffic. Only if there was parking available around this area, people could have thought to stop and grab something quick. But, there is no option of parking in Hackney. I have spoken to the counsellors and they too say there is no option available,” he said.
Economics and strategy research consultancy Pragmatix Advisory and futures experts Trajectory were commissioned by the Local Government Association to identify how councils can help create resilient high streets. This January, they released a report and pointed out how pop-up shops and community events can be used as opportunities to engage visitors and thus diversify the high street’s calendar.
Another PwC report exploring what Britons want from high streets states that shoppers are most enthusiastic about more independent shops and restaurants (63 percent) as well as pedestrianisation (54 percent) and more green space (52 percent).
Acknowledging that there are challenges facing high street retailers, symbol group Costcutter, now owned by Bestway, believes retailers need to "invest in stores
and "focus on the customer experience". And Stocking fresh produce is one of the easiest key to attract more footfall.
Photo by Dan Kitwood/Getty Images
"Retailers cannot afford to sit still and simply ‘protect’ what they currently have. While retailers have seen increased footfall in recent years, they need a strategy in place to maintain it and grow even further," a Bestway spokesperson told Asian Trader.
"To succeed in this channel, you need to invest in your store and really focus on the customer experience element of retail. This means not simply sticking with the status quo and focusing solely on what you already have.
"Instead, diversify where possible – such as bringing in more fresh produce, so that you’re not solely relying on impulse to drive profit, and start looking at what the main trends are in the channel.
"Business rates and inflationary pressures such as rising energy costs are affecting all businesses on our high streets. Independent retailers have a challenging time ahead, which is why joining the right symbol group can help businesses not only survive, but thrive."
Conclusion
While the pandemic may have ‘levelled down’ high streets, it hasn’t radically altered the geography of successful and less successful ones. Those places which had the highest number of empty units pre-pandemic are still facing the biggest challenges. Bradford, for instance, has seen virtually no change in its vacancy rate, but despite this still has one of the highest vacancy rates in the country. At the other end of the spectrum, Cambridge may have taken a bigger hit, but still ranks among the bottom 10 places with the fewest vacancies.
The localisation trend that has been accelerated by the pandemic will continue to work in favour of high street c-stores, renewing their importance.
Lowman feels it is time that high streets should go beyond retail.
“High streets, retail parks and shopping centres all have to evolve to meet the needs of the modern consumer. The offer to consumers has to be more than just retail, it has to be a shopping, dining and leisure experience rather than just a journey.”
“There is definitely a future for all of these areas, but they have to respond to consumer trends to stay relevant,” he concluded.
High street, as per experts, is ideally placed to reinvent itself in response to the shift in working and shopping habits. The fragmented ownership, lack of centralised coordination, low rents and high vacancy rates- the weaker points of high streets also present new opportunities as they open up the space for new concepts and operators, making our streets a diverse as well as an exciting place.
Leading wholesale buying and marketing group Sugro UK has collaborated with Britvic Soft Drinks, a global organisation with 39 much-loved brands sold in over 100 countries, to launch a groundbreaking Fast Food Sample Box.
The sample box is specifically designed for ICS UK LTD customers, giving them a unique opportunity to sample and experience new Fast Food soft drinks offerings firsthand.
The new Fast Food Sample Box offers ICS customers an exclusive opportunity to explore a curated selection of Britvic's best-selling and new product offerings that drives incremental sales. This trial initiative is designed to provide Fast Food retailers with a hands-on experience of market-leading products, helping them identify key opportunities for growth in the Fast-Food soft drinks categories.
Sugro UK's Fast Food Sample Box represents a pioneering approach to boosting customer engagement, providing tailored solutions that meet the evolving demands of today’s consumers. This initiative is the first of its kind in the sector, giving ICS customers exclusive access to products that are proven to drive sales and offering them a competitive edge in their local markets.
Alice Graham, GB Head of Dining Route to Market Wholesale, "We are delighted to collaborate with both Sugro and ICS with this initiative. The fast-food market has seen double digit growth over the last few years and the growth is set to continue. This initiative with ICS, a leader in fast food wholesale, underscores our commitment to supporting the growth of Britvic brands and advancing our partnerships with fast food establishments.”
Sid Musa, Manager at ICS (UK) added, “At ICS UK LTD, we are thrilled to partner with Sugro UK and Britvic on this industry-first initiative. The Fast-Food Sample Box gives our fast-food customers a unique opportunity to experience top-tier products firsthand, empowering them to make informed decisions that can truly elevate their offerings. We’re confident this exclusive initiative will help our customers stay competitive and drive growth in an ever-evolving market.”
Yulia Petitt, Head of Commercial and Marketing at Sugro UK commented: “We are incredibly excited about the partnership with Britvic delivered with excellence by our member – ICS Ltd. Fast Food sector is a big part of the group commercial strategy, so we see it as a huge opportunity for the group.”
Sugro UK is proudly owned by its 90 plus independent wholesale members, with a combined turnover of over £2.5 billion. The group was recently voted number one across all buying groups in the recent Advantage Group Survey.
British plant-based ready meal maker Allplants has filed a notice of intention to appoint administrators, citing ongoing financial losses, stated recent reports.
Allplants, known as the UK’s largest vegan ready meal brand, has faced mounting losses over recent years. Filing the notice provides the company with a critical window to explore options to avoid liquidation, such as restructuring, refinancing, or negotiating a sale.
According to the founder and CEO Jonathan Petrides, Allplants is working closely with insolvency specialists Interpath Advisory to assess “all possible options for restructuring, refinancing, and ensuring the sustainability of Allplants".
The reports added that while the prospect of a buyer offers some hope, failure to finalise a deal would likely lead to the company’s remaining stock being sold off to pay creditors. The development underscores the challenges faced by plant-based food companies as they navigate a competitive and increasingly crowded market.
Allplants started off as a direct-to-consumer brand in 2016, made its retail debut in November 2022, listing its meals at Planet Organic and several independent stores, as well as online grocer Ocado. It witnessed instant success, selling six million meals within the first three months and becoming the second-most purchased frozen meal brand on the latter platform.
Allplants has raised £67m across several financing rounds from investors including Molten Ventures, Felix Capital, Octopus Ventures, The Craftery, and professional footballers Chris Smalling and Kieran Gibbs.
Allplants’s move to appoint administrators is indicative of the distressed vegan ready meal category in the UK. It was among the categories that have witnessed a drop-off in sales recently, falling by 20 per cent between 2022 and 2023, according to Circana data commissioned by the Good Food Institute, which attributed it to cost-of-living pressures that led shoppers to cut back on non-essential and convenience items.
The country’s largest meat-free company, Quorn, posted pre-tax losses of £63m in 2023, a fourfold increase from the £15m it lost the year before. Meatless Farm and VBites also came close to the brink, before being rescued by VFC (now the Vegan Food Group) and owner Heather Mills, respectively.
Entrepreneur and businessperson Stanley Morrice, an influential figure in the retail and wholesale sectors, received an Honorary Doctorate from the University of Stirling at Stirling’s winter graduation held today (22).
Stanley, from Fraserburgh, is being recognised for his services to Scottish food, drink and agriculture. He entered the sector as a school leaver. In 1993, he joined Aberdeen-based convenience stores Aberness Foods, which traded as Mace. He rose to become Sales Director, boosting income by 50 per cent and tripling profits, and went on to be Managing Director, successfully leading the business through a strategic sale to supermarket group Somerfield.
Throughout a stellar business career, Stanley has set up, led, managed and sold more than 100 companies, from retail, wholesale and property to coaching and mentoring firms, in the UK and internationally.
An MBA graduate in retailing and wholesaling from the University of Stirling and Chair of the University of Stirling Management School’s International Advisory Board, Stanley was recognised with an MBE in 2022 for his work to support sustainable food and drink production in north-east Scotland.
Collecting his degree along with more than 300 other graduates at Friday morning’s ceremony, Stanley said, “I am deeply honoured to receive this recognition from the University of Stirling, where I completed my MBA in 1998. The University has played a pivotal role in shaping my career, and it has been a privilege to serve as Chair of the International Advisory Board at Stirling Management School since early 2020.
“This honorary degree reflects the University's commitment to cultivating industry partnerships and its dedication to preparing students for success in the business world. I was grateful for the opportunity to contribute to Stirling's mission of fostering innovation and developing future leaders.”
Professor Sir Gerry McCormac, Principal and Vice-Chancellor of the University of Stirling, said: “We are delighted to be awarding an Honorary Doctorate to Stanley Morrice, who has been an influential and exemplary figure in business and entrepreneurship, and in his advisory role at the University of Stirling. We know Stanley’s accomplishments, impact and leadership will be an inspiration to those graduating alongside him this week.”
In total, more than 1,000 students will graduate from the University of Stirling this week. Three ceremonies are being held across two days (21 – 22 November) as students celebrate their academic achievements alongside their families, friends and University staff.
British consumers have turned less pessimistic following the government's first budget and the US presidential election and they are showing more appetite for spending in the run-up to Christmas, according to a new survey.
The GfK Consumer Confidence Index, the longest-running measure of British consumer sentiment, rose to -18 in November, its highest since August and up from -21 in October which was its lowest since March.
Economists polled by Reuters had expected a deterioration in the confidence indicator to -22. Neil Bellamy, GfK's consumer insights director, said consumers seemed to have moved past their nervousness in the run-up to the 30 October budget and the 4 November US elections.
Finance minister Rachel Reeves announced a big increase in taxes on 30 October but the burden fell mostly on businesses rather than individuals.
Bellamy said it was too soon to say a corner had been turned. "As recent data shows, inflation has yet to be tamed, people are still feeling acute cost-of-living pressures, and it will take time for the UK's new government to deliver on its promise of 'change'," he said.
All five of the five components of the GfK's survey rose this month, led by a gauge of shoppers' willingness to make expensive purchases which rose five point to -16.
The survey was conducted between 30 October and 15 November and was based on the responses of 2,001 people.
GfK’s survey reported modest improvements in consumer measures of their personal finances and the general economic situation over the next 12 months. The figures clash with a separate survey of 1,500 households which showed growing pessimism over job security, according to S&P Intelligence.
“Consumer confidence continues to be variable but ability to spend depends on household circumstance,” Linda Ellett, UK head of consumer and retail at KPMG, said. “Inflation and interest rates having not yet sufficiently fallen and a toughening labour market are all weighing on the minds of many people.”
The government announced a £20 billion rise in employer national insurance contributions at the budget, as part of its promise not to hit “working people” with extra levies. Labour has also cut back on winter fuel payments for all pensioners, and said it will boost pay for public sector workers this year.
British retail sales fell by much more than expected in October, according to official data that added to other signs of a loss of momentum in the economy in the run-up to the first budget of prime minister Keir Starmer's new government.
The Office for National Statistics (ONS) said sales volumes have fallen by 0.7 per cent in October. A Reuters poll of economists had forecast a monthly fall of 0.3 per cent in sales volumes from September.
The drop was the sharpest since June when sales fell by 1.0 per cent from May. A monthly rise in sales in September was also revised down to 0.1 per cent from a previous estimate of a 0.3 per cent gain.
The ONS said retailers across the board reported that consumers held back on spending ahead of the new government's first tax and spending budget on 30 October.
It also said a possible contributor to the weakness in sales were the school half-term holidays for England and Wales which typically fall within the October data reporting period but did not this year.
Sales of clothing were particularly weak in October, something reflected in previously released figures for the month from the British Retail Consortium, representing the industry, which linked the fall to weather that was warmer than usual.
The ONS said during the 12 months to October, sales volumes rose by 2.4 per cent, slowing from September's 3.2 per cent rise and weaker than the median forecast in the Reuters poll for a 3.4 per cent increase.
Slow start to Golden Quarter
Jacqui Baker, head of retail at RSM UK and chair of ICAEW’s Retail Group, described the figures as a “concerning start to the Golden Quarter” - the busiest period for retailers.
“With half-term falling later this year and relatively mild weather, consumers have put off buying their winter coats and boots. This has made it difficult for retailers to shift stock,” she said. Many shoppers appear to be holding out for Black Friday deals, which Baker predicts will lift sales throughout November.
Baker noted that despite a challenging October, there is hope for a recovery in the months ahead.
“The Budget didn’t deal a huge blow to consumers in the form of tax rises, plus interest rates continue to come down, and the American election is now out of the way, which should help with confidence and create a clear runway for Christmas spending,” she said.
Thomas Pugh, an economist at RSM UK, echoed these concerns, pointing to the timing of the school half-term as a significant factor in October's sales slump. However, he expressed optimism about the longer-term outlook, predicting that retail sales would grow through 2025 as “higher consumer incomes and rising consumer confidence … feed through into higher spending volumes.”
He added: “While headline inflation jumped from 1.7 per cent in September to 2.2 per cent in October, retail prices fell at an accelerated rate. Indeed, retail inflation dropped from -1.3 per cent to -1.6 per cent, meaning lower prices will help a rise in spending feed through into bigger increases in sales volumes.”
Silvia Rindone, EY UK&I Retail Lead, highlighted consumer caution as another key factor behind the October decline.
“The decline in sales volumes can be attributed to a decrease in consumer confidence, influenced by several factors including uncertainty surrounding the Autumn Statement, rising energy bills, and the impending costs of Christmas,” she commented.
EY’s latest Holiday Shopping survey revealed that nearly half of consumers began their festive shopping before November, aiming to spread out holiday expenses.
Rindone warned that retailers face a challenging period ahead, with upcoming labour cost increases, including changes to National Insurance and a minimum wage hike set for April 2025.
“The next few months are critical… Retailers will need to ensure they drive margin this Golden Quarter so that investments can be made in their proposition,” she said.
“As our survey found, shoppers are willing to spend if the price is right and the proposition is strong. Continuing to operate as efficiently as possible while steadily improving the experience for customers will be key. Much like the last few years, the market is getting tougher, and only those able to continually evolve will thrive.”