The year 2018 will be remembered for many reasons: an unwavering belief that England would reach the World Cup Final; a seemingly never-ending heatwave that made the UK feel more like a tropical oasis than the soggy summers of yesteryear; and the revelation that our high street was in trouble – serious trouble.
When the news broke that House of Fraser had collapsed last August, the general public were horrified that this British institution would be no more.
It was saved at the eleventh hour, thanks to a £90m buy-out by Sports Direct, but still faces a minimum of 12 store closures to reach financial improvement targets.
This number is in stark contrast to the original planned closures by its former owners; however the forecast for other high street proprietors remains bleak.
Across the country, major retailers have announced “an estimated 1,267 shops have been closed or earmarked for closure since January – potentially putting 25,159 jobs at risk,” says The Telegraph.
This doesn’t take into account the smaller independent stores, which Sky News reports is almost double, with 2,692 closing during the first six months of the year, alone.
It’s easy to see why many retailers are struggling to stay afloat. Rising city-centre land values result in premium rental prices; a booming e-commerce industry deters shoppers from entering bricks-and-mortar stores; and crippling business rates, to boot – all of which threaten to sink even the most profitable of businesses.
Could Super Sheds be the answer?
Meanwhile, huge industrial units - or Super Sheds as they are colloquially known - are seeing record levels of retail occupier growth.
Whilst formerly considered unglamourous and assigned to manufacturers and large-scale factory operations, Super Sheds being occupied by retailers is not a new prospect. However, since the dawn of online shopping, the demand for logistics space has grown remarkably.
Research by CBRE shows that 60% of warehouse space is used by retailers, with 235 million sq ft leased or purchased between 2007 and 2018. The data, compiled for the BBC, also reports the total space occupied by retailers has almost doubled in comparison to 2007, when just 130 million sq ft was required.
One explanation for this increase can be attributed to consumers demanding a near-immediate delivery service. Amazon bucked the trend, offering their Prime ‘one day’ delivery service. However, Amazon remains a different beast, even experimenting with drone delivery to ensure their customers’ orders are fulfilled within the hour.
On a wider scale, retailers are recognising the need for logistics units with connectivity to major motorway networks to keep up with advancements in delivery times, something that is making the East Midlands a very lucrative industrial hub, being able to reach most parts of England and Wales within four hours.
We have seen growing interest from our clients in this area, along with the West Midlands; most recently delivering as Cost Consultants on the Vaughan Trading Estate in Tipton.
What next for the high street?
One theory is that the UK high street will become more of an experiential excursion, where the customer can try samples, consult stylists for tips and complete online order forms for products to be delivered at home.
Bringing the online, offline, already exists in the form of Amazon Go. The ground-breaking supermarket has no tills or employees, tracking purchases via customers’ smartphone apps, assisted by shelf sensors. Of course, this adds fuel to the “automation taking over jobs” fire, but a novel idea, nonetheless.
More experiential concept stores are popping up on a regular basis, although many are still limited to London. For example, Dyson has a shop on Oxford Street where customers can turn spills into thrills, testing out hoovers on a wide range of surfaces and nasties.
With this in mind, there may no longer be a need for shops to carry endless stock options if they convert to the ‘try before you buy’ offering – meaning that they will no longer require such a large retail store, but perhaps a larger warehouse and improved online capability.
The High Street as we know it may soon be obsolete, but there is hope that more coffee shops, independent retailers, social experiences and city centre living will breathe the life back into our town centres.
What do you think the future of the High Street will be? Please share your thoughts.