Four reasons why high streets are the future

We were asked to write an article for London business magazine, Business First. The fate of our high streets is something that we spend a lot of time thinking about and arguing the toss over on these pages, so it was a natural topic to write about - it also gave us an opportunity to plug two of our favourite things: Brockley and Homemade London.

Our contention is that (recession notwithstanding) this is the most exciting time for London's high streets since the 1970s. Here's why...

Public debate about the future of the UK high street has intensified as the bodies of British retailers have stacked up. In May, Mayor Johnson launched a competition to find three London high streets to act as pilots projects, following the recommendations of the Mary Portas review. Meanwhile, more employees have been affected by retail failure in the first half of 2012 than in any year since 2008 and it’s on course to surpass that depressing benchmark by the end of the year.

The list of the biggest name retail casualties of recent years includes Clinton Cards, La Senza, Peacocks, Comet, MFI, Habitat, Focus DIY, JJB Sports, Adams and Borders. They range from local high street retailers to shopping centre regulars and big box brands.

Despite this grim backdrop, this is, perversely, the most exciting time for London’s high streets in decades. That is because high streets aren’t the common denominator in this misery – (bad) retailers are.

In fact, the high street is part of the solution for ailing retailers. In April, Tesco CEO Philip Clarke confirmed that his strategy to re-engage shoppers would involve rebalancing the portfolio away from big box Tesco Extra stores towards smaller format stores. It was the latest signal supermarkets are scrambling to deliver growth by returning to the high street. Jon Copestake of Retail Gazette explains the trend simply: ‘Sellers need to be where their customers are and not the other way around.’

For decades, supermarkets have been cast as the enemy of the high street, so the fact that they are now recolonising the locations they left behind might seem like dubious evidence of green shoots, but there are four fundamental reasons why London’s high streets have a bright future:

1. Fewer cars

Car use has been declining among Londoners since the 1990s.

‘The picture for the whole of Britain has been quite stable since the mid-1990s, but London is a very interesting case,’ says David Metz, of UCL. ‘[The number of car journeys per person] reached its peak in the early 1990s, has been declining ever since and it's projected to go on declining as the population keeps growing.’

Fewer cars means more demand for local shops and services, easily accessible on foot. This change is partly due to higher density development of the capital, which according to Christine Whitehead, Professor of Housing Economics at the London School of Economics, ‘traditionally generates more, but shorter, trips using more public transport.’ This brings us on to fundamental reason number two.

2. Smaller homes

Boris Johnson decries London’s ‘Hobbit Homes’ but London’s population boom has not been met by a house building bonanza. Our living space is shrinking.

The average UK new build home is smaller than the average Dutch or even Japanese new home. And London’s existing housing stock is being subdivided into smaller and smaller dwellings. As our living space shrinks, so we want to spend more time outdoors.

You can see the effect in action in my South East London neighbourhood, Brockley, where I run a community website. Where once the residents rattled around in nice big houses, and barely bothered with the decaying high street next door, newer residents are squeezing into flats and spilling out of their homes to spend time and money locally. Brockley Road is making a slow but steady recovery.

Businesses like Big Yellow (whose growth is driven by London and the South East) are responding to Londoners’ lack of room, but so are the cafes and bars that realise their real business is renting living space, rather than selling coffee or beer.

3. More time

The internet might be taking an ever-growing share of Londoners’ wallets, but in return it is freeing up time that was otherwise spent on drudgery. Since I discovered internet grocery shopping about three years ago, I can count on the fingers of one hand how many times I have set foot in a physical supermarket. My weekly shop used to take up one or two precious hours of weekend time. Now, it’s done on a phone during TV ad breaks. There is evidence that the cumulative effect of these kinds of lifestyle changes is significant.
In 2006, American academics Mark Aguiar and Erik Hurst showed that Americans have much more leisure time than they did 40 years before. As The Economist explained: “Appliances, home delivery, the internet, 24-hour shopping, and more varied and affordable domestic services have increased flexibility and freed up people's time.”

Having been given the gift of time, Londoners want to escape their poky flats and spend time and money on experiences. And if they’re given the option, they’ll do it locally. That’s why I disagree with the prediction of Philip Dorgan, a retail analyst at Panmure Gordon, who recently said, ‘The high street will become full of coffee shops, building societies, kiosks and hubs to pick up stuff. It's a different place from 10 years ago and I imagine in 10 years' time it will be a different place again.’

This is too reductive a vision. High streets also have a bright future as centres for the experiential economy. As digital channels hoover up more and more areas of retail, doing stuff will replace buying stuff as the primary function of the high street and in turn those same digital channels will facilitate the growth of thousands of new high street businesses. This brings us on to driver number four.

4. Unlimited customer reach

Digital technology has brought the cost of marketing down for high street businesses. Small independent businesses can now reach the whole of London for no or very little cost, thanks to social media, search-based advertising, daily deal sites (treat with caution) and CRM. That doesn’t just bring costs down, it opens up new possibilities, allowing high street businesses to target niche interests – and in a market the size of London, every niche is big enough to sustain a business.

Two years ago, I co-founded a small high street business called Homemade London. It offers unique experiences to people interested in trying their hands at everything from perfume- to lingerie-making. There wasn’t an established market for these kinds of experience and we had a tiny marketing budget to find our target customers, who were scattered across London. We didn’t know who they were and it had probably never occurred to them that their life was missing what we had to offer. Yet with a tiny marketing budget we have been able to grow a sustainable business.

Before the internet, we’d have needed much deeper pockets to make it work – most likely, it would never have existed at all. Back in Brockley, a local photographer decided to start a food market in a high street car park that was deserted at weekends. Through social media (and yes, a hell of a lot of leafleting) he filled the place on opening day and has turned it in to a weekly event that attracts people from miles around.

To encourage London’s high street renaissance, policy makers need to stop wringing their hands and do two simple things. Firstly, invest in the quality of the high street to create an environment where people enjoy spending time – plant trees, replace cracked paving and remove clutter. Secondly, stop obsessing about bringing ‘retail’ back to the high street and make it easier for experiential businesses to open – let shop space be converted in to bars, cafes and other places where people want to spend time and let informal spaces like car parks be re-used in creative ways.

Earlier this year, a San Francisco State University study found that ‘experiential spenders’ get more well-being for their money than ‘material spenders’. Encouraging the experience economy is not only the right economic strategy for London’s high streets, it will also make Londoners happier.

33 comments:

Anonymous said...

well, nice bit of PR for something . . .

Tim said...

I think that's a great article Nick . Internet has changed Retail and people need to move on. Specific worries about Brockley Road:

It's disjointed
Lewisham Council are clueless
CPZ would help

Tim said...

Oh, and too much traffic down the middle of it.

Cllr Mike Harris said...

Excellent article Nick. Demographics are also key to this, Lewisham's elderly population is in relative decline, and the number of families is increasing. So expect high streets to offer ever more services tailored to children.

I share your optimism. As long as the localism act doesn't lead to a rash of convertions from shops to flats.

Hardlianotion said...

Excellent article. Kind of inspiring, too.

Michael said...

Good article. I completely agree that the main focus for the council must be to improve the street environment, making the high street a place that is as pleasant to shop as a massive indoor shopping centre on the M25.

But I disagree about allowing any change of use of retail units, not when changing to cafes, but certainly to betting shops, pay day loans, churches, phone basesd take away outlets, and conversion to residential. High streets do need protection from these uses dominating the streetscape. Some conversion may be appropriate but this should be the exception rather than the rule.

Anonymous said...

Surprised you didn't mention Woolworths?

If the High St is to survive it won't do so by following the Brockley model of just filling it with a very narrow definition of what "nice" things are.. Delis, childrens Shoe Shops, organic seed shops - these things don't really fly outside of our little pocket of strangeness. If however they keep it real, knock down prices and keep quality up, then they'll have a winner on their hands.

Tim said...

Anonymous - what do you mean? Can you give me an example of a shop that knocks down prices but keeps quality up?
Also, I think the whole point IS that the High Street is going to be more specialist and won't offer things you can buy on Internet/in mall

Anonymous said...

A good example would be something like Poundland or Poundstretcher - items on sale for £1 that could be £5 or more elsewhere, for the same product. Yet the shop still feels bright and tidy. That is honest selling.

Tim said...

How depressing. A High Street dominated by Poundland esque shops.

Anonymous said...

I don't believe that's what anyone was suggesting. Just something a little more honest and sustainable than twee cafes

Tim said...

Do you use the word "honest" as humour, to antagonise, or in all seriousness? What is dishonest about any legal business?

D said...

The 'twee' cafes are sustainable though - Brockley proves that. You may not like them - presumably for some weird class related reason of your own - but tough shit. Many do.

mb said...

"sustainable" if you mean still here after a few years them Broca, Browns, Degustation all fit. Dandelion Blue and others didn't. Sell stuff or provide a service that people want. That's all. For example, there used to be a blacksmith at Vrockley Cross according to an old map i have. A more good honest trade would be hard to find. Trouble is, no mater how heartwarming people don't own horses in London these days but do want decent coffee and a place to meet. Nothink wrong with Pound Stores by the way, I wouldn't put them in the same category as Betting shops full of slot machines and Pawn Shops offering 1000% loans.

gibby said...

Sometimes I despair of the inverse snobbery on here.

Anonymous said...

Beautifully written. Brockley's high street is getting there too.

Anonymous said...

Beautifully written. Brockley's high street is getting there too.

gibby said...

I was referring to @anon 13.27
Yawn.

Ohbummer said...

A decent pub on the high street might help.

Anyone fancy building one?

Anonymous said...

All the hobby-horses in one post!

D said...

No response about what 'honest' means in this context I see. What a surprise.

Brockley Nick said...

Thank you for your comments.

@Mike - good points.

@Michael - agree with you and if I gave the impression that I support a laissez-faire approach to planning, I apologise - I think Councils need to be careful what changes are made. But they also need to be flexible, rather than rigid.

@Anon1540 - barely even scratched the surface!

Ben said...

Now Tesco's out of town stores are failing they should definitely move into the booming high streets they helped destroy.

Ben said...

*maybe booming is a little strong, improving.

Ez said...

A lot to agree with here, but it will probably also have to coincide with managed decline.

Improving the public realm will be crucial in concentrating experiential clusters at the expense of letting other retail centres convert to housing.

Not everywhere will succeed.

pip said...

Poundland is great, but to suggest its a model for all shops is breathtakingly stupid.

If Poundland's suppliers ONLY supplied Poundland, a lot of them would go bust. And everything in there (even more than now) would be make by people earning less than a dollar a day. If that's your idea of retail Utopia, you're welcome to it.

david said...

Good article Nick and an especially valid point over how cafes/pubs present themselves as a space rather than simly a purveyor of coffee/beer. However, slightly dismayed that a number of posters seem fixated on high streets, Brockley's in this instance, being about either cafes-delis-organic-gizmo shops or fried-chicken-bookies-Brockley-Barge type places. Surely it's all about balance. To use my high street effectively, ideally I want to do everything I don't do over the internet which means, for me: somewhere to meet and have a drink, somewhere to buy fresh fruit, veg, meat and fish, somewhere to buy cleaning products, canned goods etc when I need them now-ish, somewhere to get DIY stuff, or bits to fix my car or maybe even somewhere to get something to eat at midnight on a Friday or place a bet on the Grand National. My point is, all of these establishments offer "honest fayre" for someone and for the high street as a whole to thrive it needs to offer viable services to as wide a possible demographic as possible. Diversity, ain't it great?

Anonymous said...

Item 3, does your shopping list reflect whats on during the ad break?

Anonymous said...

I don't think anyone's suggesting that all shops should be poundland - of course not. Just a bit less of the trend for dishonest fayre would be nice. Filling the high street with "twee" will push more people out than it pulls in. This is London, not The Good Life.

Lou Baker said...

Interesting article Nick.

I particularly agree about being able to change the use of a building. That holds so many businesses back.

I question the wording of the car point though. I doubt there are fewer cars now than in the 90s. They may be used less often, but I'd wager there are more cars now than 20 years ago.

Two more points. When they improve high streets councils must consider proper cycle parking. Southwark is good at this, Lewisham is not. In Southwark you will struggle to find a parade of shops without bike parking. In Lewisham the reverse is true. Very short sighted. Buggy parking facilities are lacking everywhere. Yet we have excessive blue badge parking.

Finally, communities can help themselves. The arrival of a Tesco Express or Sainsburys local has the potential to transform a high street and attract many more customers. Instead the pinko brigade turn out en
masse, stomping around in their sandals to try to push these successful businesses away. Decent small retailers and cafes not only survive but thrive if a supermarket local arrives. And yet the sanctimonious numpties do all they can to hold enterprise back.

Anonymous said...

Nicely argued. The only problem is that Brockley hasn't got a 'high street', the revival of real high streets, in local larger centres could actually have a negative impact on little parades of shops such as exist in Brockley. Imagine if Lewisham shook off its shoody 'Pound Shop' image and started to offer real choice and variety. What place for little parades in this world, beyond the fried chicken and cheap booze that seem the current staples.

david said...

1055, Completely agree that too much twee is a bad thing, it's all about balance. I love Brockley market but I'm not going to find washing powder or light bulbs, for example, there.

Lou, good points about transportation. Number of journeys driven doesn't equal volume of car ownership. Again, it's about balance. If I'm going for a beer, I'll probably walk, to the barbers I'll go my bike, to Mr Lawrence's to stack up on wine I'll use my car. There is no point in excluding any part of your market.

1125, Yes there is a higj street. It runs from the Brockley Jack/Babur take-away to the south up to Jam Circus-the Dentist to the north, and as well as that we have the Brockly Cross parade and whatever you want to call the bit around Sid's bathrooms supplies. No, it isn't as big as Lewisham or as glam as, say, Marylebone but it's an ideal example of a local London high street for a vibrant local area

Darryl Prinz said...

Quote: "Through social media (and yes, a hell of a lot of leafleting) he filled the place on opening day and has turned it in to a weekly event that attracts people from miles around." - Social media has made some people millionaires and billionaires. It is everywhere, and it has become more than a friends finder site. Now, the social media becomes a witness to our progress.

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