The future of Britain’s high street: Is it really condemned?
By Ellie Anderson, Junior Consultant
In an interview recently, Gymshark’s CEO, Ben Francis, announced that the brand's future was on the high street, not online. This is despite only opening its first store in 2022, with the £1-billion company seeing profits almost exclusively from online sales. With brand after brand on the high street closing its doors – both physically and metaphorically, this announcement may have come as a surprise to many.
In the last year alone, household names, such as Paperchase, Toys R Us and Missguided, have fallen into administration, following the likes of House of Fraser and Debenhams, who struggled to succeed in a post-pandemic world. Other big household names have had to make changes to save themselves from the same fate, as Marks & Spencer’s demonstrated in their announcement in May, permanently closing 10 of its stores this year, with plans to shut 67 stores in the next five years. A trend that many brands are following suit on, with B&Q, Argos and Boots all making similar decisions.
Many in the industry say that these difficult decisions are a result of rapid change in customer behaviour, including CEO of household fashion brand H&M, Karl-Johan Persson, who has admitted store closures are the obvious solution in avoiding loss of profits.
Why, then, has Gymshark only now started the process of opening in-person stores? Despite the intense focus on online shopping, in January 2022, just over 25% of all retail sales were done online, falling to their lowest levels since 2020, with many consumers being drawn to a ‘brick and mortar experience’.
With Covid having changed the game, in relation to the health and wellbeing of our high streets, they are still coming out on top: by a significant margin. Although online shopping figures are exceeding that of pre-pandemic levels, this high street is clearly still coming out on top, by a significant margin. While there has been a shift in trends, with many consumers preferring the ease of online, the high street is still a crucial fixture in the lives of many. This becomes even more pertinent with the older generation, who feel ‘neglected’ and ‘overlooked’ by retailers online.
As trends point towards a continued increase in online shopping, however, with the likes of Amazon and ASOS both experiencing profit increases in recent years, there remains a need to act and avoid the steady (but palpable) move away from brick-and-mortar shopping.
Instead, many are calling for a holistic approach to our high streets. It is evident from the pandemic that our high streets are not a monoculture of retail shops, but rather a plethora of independent retailers, markets, restaurants and services.
This has been particularly relevant in areas where there has been a mass influx of people, leaving inner cities across the UK (like London, Bristol, Cardiff and Manchester) for the suburbs and beyond. In 2022 alone, 150,000 people left the Capital for the commuter belt and beyond. A direct factor of this, according to a Local Government Association report, was that consumers had come to favour a community feel, instead of the commercial aspect typically associated with large high-street brands. In a recent study, it was revealed that two thirds of shoppers favour independent brands over chain-stores when shopping, with similar figures preferring locally sourced products over mass-produced items.
The change in trends doesn’t sit solely on the shoulders who have relocated either, with the older population now bucking the long-standing tradition of being ‘brick and mortar’ shoppers of the world. Following the end of the pandemic, a survey showed 53% of people over 65 shopped online.
With shopping habits seeing significant upheaval, as online outlets dominate the space on ease and access to millions of products, there is a truth our high streets need to confront: they must set themselves apart from simply being a place to shop. With customers given the freedom and ability to access the product from the comfort of their own home, their visit to the shop should represent something unique, where the experience cannot be replicated online.
Both the Government and the Labour Party have recognised this: with the two having taken steps to address the issue of diclinism and promote a flexible and diverse environment, encouraging the high street to pursue a range of activities, aside from retail shopping.
Outlining a 5-point plan to ‘reverse 13 years of decline, and revitalise local high streets', Keir Starmer pledged £700m in support of small businesses. Furthermore, Labour has pledged to cutting business rates for the coming year, funded by increasing the digital services tax paid by online companies like Amazon – this move, it claims, will be worth more than £2,600 to the average pub, café or restaurant.
The Government, in equal measure, has been following their blueprint of a Build Back Better High Streets Strategy, announced in 2021, which focuses on the diversification of high streets to include a mix of uses, such as housing, offices, retail, hospitality, leisure, arts and culture, healthcare, physical activity, green space, seating, and child’s play. The plans include £10bn worth of funding specifically targeted at urban regeneration and spurring private sector investment in historically underinvested in areas.
Where high streets have started the move to become more diverse in their offering, we have seen elevated levels of engagement. This includes a rise of 38% rise in retail sales and a further 90% of customers returning to the high street within a month; reporting ‘positive experience’ as the key reason for their return.
This is the case for Gymshark, for example, where shoppers can have an in-store workout as part of their experience, with refreshments and changing rooms available. Wanting to combine the ‘conditioning, retail and community’ of the company, the company has recognised their flagship store not simply as a ‘brick-and-mortar' experience, but an extension of their brand identity.
With 57% of shoppers now actively seeking out other ventures away from the typical transaction, our high streets need to both address the issue and come up with innovative solutions to retain and entice customers. With Wilko, another household name, entering into administration this summer, there is a pressing need for many brands to find solutions. With physical store space projected to reach up to 40% in availability over the coming years, “retailtainment”, the combination of both traditional retail and entertainment designed to give customers a unique experience is the next step for many to take.