High Street: Are You Going Down?
From being the beating heart of any British town, high streets today are looking pretty run down. Outside of big UK cities, city centers are becoming less and less vibrant and suffering from significantly reduced consumer traffic.
A recent BIS (Department for Business, Innovation and Skills) report attempts to understand where city centers are going and what is causing their demise. I thought I’d share some of the factors that are influencing the success or failure of high streets to remain relevant in a changing retail world.
First, the recession. High growth of the British economy was replaced in recent years with austerity. That has led to a situation in which consumers’ real disposable income rates have been negative ever since 2010. Moreover, consumers are more conservative and choose saving over spending. This, along with the VAT increase and banks’ unwillingness to give small retailers loans, has forced many to close or downsize. High streets in many cases are looking deserted and are not appealing to the consumer looking for a fun shopping experience rather than a functional one.
Second, competition. Large-format stores and out-of-town retail parks, accessible by car and where all shopping is done under one roof, dominate the market. These are starting to replace the high streets as the retail norm and are being chosen by consumers as a more convenient and efficient shopping option. These centers, which typically combine a conveniently located parking lot and stores that answer all of the consumers’ needs, have turned out to be an answer for consumers looking to turn shopping into a leisure activity. Families with children and baby boomers, two segments that are considered “big spenders,” prefer the indoor, heated, and easy-to-access option over the outdoor, often cold, and less accessible high street.
Another type of competition comes from e-commerce options that aggregate consumers’ behavior and preferences to offer them targeted deals. The UK online retail market doubled between 2010 and 2011. E-commerce has crushed the high-street book and music stores and is also biting into the profits of other categories such as electronics, grocery, clothing, etc.
Other factors include demographics, with special attention to the elderly community and its low level of mobility, which is making elderly people stay away from the high streets, and students, who play a key role in keeping town centers alive and kicking. Regulation, government, and city support and transportation also play a role in the deterioration vs. prosperity of high streets across the UK.
I would like to finish on a positive note, and of course small businesses have something to do with it. Startup Britain, an initiative founded by eight entrepreneurs and supported by the government, is encouraging small online retailers to revive Britain’s high streets by sharing space and renting the available stores in order to get their products and services out there. Yet again, small businesses are supporting economic and social growth in their communities.
Related Posts
|
|
|
