Gloomy predictions about the future of the high street have been a common theme in the news over the last few years. A host of well-known brands are either gone or seem to be struggling against the modern shopper’s thirst for online options.
In the past year alone, high street stores covering a vast range of sectors have closed completely, from Maplin to Toys R Us. It seems time, then, to ask if the high street is really doomed and what, if anything, can be done about it?
The Closures and The Struggles
The first sign for many that the high street might not be as healthy as it once was came back in 2008, when high street stalwart Woolworths unexpectedly announced closure of all of its 807 storefronts. The result was job losses of 27,000 and a public wondering if this was a sign of things to come or simply the result of Woolworths failure to adapt to a modern marketplace. It turns out the answer could actually be both.
Since then, the UK high street has seen small spikes of reprieve, but internet shopping has only become more popular. This has resulted in an attendant, large drip in high street profits. In the last year alone, Maplin, Toys R Us, Mothercare, Prezzo and Carpetright have all closed, showing how the high street crisis reaches across all kinds of businesses. Within the last month, Poundworld has announced the appointment of administrators, and House of Fraser has outlined the need to close stores and cut costs. Only in the last week has New Look revealed a £243 million loss for the last financial year.
BDO, which monitors high street sales month to month, revealed that high street sales were down in May 2018 by 2.2 percent over last year, showing that it is now 8 months since like-for-like sales have grown by 1-percent or more.
The Possible Solutions
Business rates are a big area of contention currently, and a lowering could have real benefits. Labour has repeatedly stated that the business rates system is unfair and penalises brick and mortar stores, whilst online retailers are largely unaffected. The government increased business rates back in April – for the second time in two years. The major issue is that major online retailers like Amazon use out of town warehouses, which have much lower property values that city centre retailers. This has led many business leaders to point out the issue and decry it as unfair.
Beyond this, high street businesses will have to focus their attention on the online market, hoping they can offer in-house deals and service that will tempt online shoppers away from super-sized retailers like Amazon. High street retailers will have to get serious about their online offerings, or they may have nothing to offer at all.
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