There is no getting away from the fact that the UK high street as it stands is obsolete. E-commerce companies are taking over the retail sector and with their relatively low cost base they will always be more competitive than shops. In recent times we have seen entrepreneurial spirit on the high street converting traditional shops into an array of other businesses. So, what is the key to high streets of the future?
Life on the UK high street
Whether we like it or not, e-commerce is taking over the traditional high street. We have seen some of the U.K.’s core retail companies like Marks & Spencer and BHS struggling to survive. Each week brings another round of talks between retailers and their landlords regarding a reduction in rent. Many landlords are stuck between a rock and a hard place, if they maintain current rent rates they know their tenants will not be around for long. However, if they reduce their rent rates then this will impact their income and could push them towards a financial crisis.
The only way to compete with the Internet is to create a high street which depends on face-to-face business and physical services. Everything from gyms to a wellness centre, micro-cinemas to craft breweries is now under consideration. Gone are the days when the high street was dominated by retail shops. We are now looking towards customer driven customer service businesses.
It is fair to say that the vast majority of us would never visit a doctor or a “wellness centre” unless we felt obliged to after receiving correspondence for an appointment. The NHS is struggling for money, general practitioners are falling in numbers and we have seen the emergence of so-called wellness centres. If you walked past one of these centres on a regular basis would you be tempted to go in and check out your ailments? You may even be able to arrange an appointment on the Internet but you will physically need to see a medical practitioner for an examination and advice. Doing that as you go about your everyday business on the high street surely more convenient?
Fitness, fitness, fitness
Over the last 20 years or so we have seen the emergence of out-of-town gyms due mainly to the fact that business rates were often too high on the high street. While local councils across the UK have attempted to push business rates higher, to make up for austerity shortfalls, the business rates model is a busted flush. Eventually it will be revamped, rebased and rereleased. Government and local councils will eventually see that an increase in fitness facilities on the high street, easily accessible, will slowly increase the health and well-being of the nation. This will have a knock-on effect to expenditure on areas such as the NHS, absenteeism at work and should increase UK productivity overall. A win-win for all….
Social facilities and accommodation
There is already a trend which has seen many multi-storey older shopping facilities converted into first ground shops with other floors made into flats. We have seen the emergence of roof gardens and an interesting move towards housing for the elderly. Historically, one of the main issues for those in retirement has simply been loneliness. Whether because of physical disabilities or a lack of facilities in the area, mixing with like-minded people has not been easy. So, the creation of social facilities and accommodation on the high street is a win-win. This brings together individuals and groups who may wish to socialise but have limited opportunity. It also ensures a more vibrant high street and no doubt the creation of complementary businesses.
Governments and local councils will need to rethink and revamp the business rates income model. As more and more retailers go under, councils seem intent on pushing rates higher thereby exacerbating the problem for those trying hard to remain on the high street. To re-energise the high street we will likely see the disappearance of traditional high street shops in favour of customer driven customer service operations. We will always have the traditional newspaper shop, and food outlets will remain popular, but converting large swathes of the U.K.’s retail estate into social facilities and accommodation seems inevitable.