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Is ‘the death of the high street’ a myth?

26 September 2018 by Louis Farquharson

Now that I found myself almost five months into my new role at LDC, it feels like a good time to write my first blog. And it seems that most appropriate topic to discuss would be the state of Great Britain’s high streets. As I am relatively new to the industry, I hope my fresh, and perhaps optimistic viewpoint coupled with LDC’s accurate and granular data on the retail market will offer some interesting and thought-provoking ideas.

Most mornings I receive various news alerts from across the media and it all seems to be doom and gloom. “The British high street is dead!” is something I have become accustomed to reading while drinking my morning coffee. This negative press has stemmed from reports over a tough first half of this year. Over the first eight months of this year we’ve watched the struggles of some high profile retailers and leisure operators, most notable being House of Fraser which collapsed into administration. Albeit, House of Fraser was bought out of administration soon after by Sports Direct owner Mike Ashley for £90 million and the story continues on today with minimal store closures. Other noteworthy chains who have had to restructure include; Homebase, Prezzo, New Look, Carpetright, Mothercare and of course Toys R Us.

So, with all these stores shutting up shop, the vacancy rates across the UK must be shooting up, right? Well, despite the struggles of these big names, GB vacancy rates rose for the first time since 2012 at the end of 2017, with a very marginal increase of 0.2%. The first half of 2018 saw an additional rise of 0.1% bringing the GB vacancy rate to 11.3%. When we look specifically at the high street, which has been the main focus of the media spotlight, with news headlines claiming that we are in the midst of ‘crisis’, ‘death’ and even (rather dramatically) and ‘apocalypse’, data collected by LDC shows that since 2013, vacancy rates have more or less been declining on the high street, as you can in figure 1 below.

Figure1Figure 1: GB vacancy rates from 2013 – 2018 split by retail location type. (Source: LDC)

Along with the big companies previously mentioned, pubs have also been majorly affected by the changes we are seeing on our high street. According to LDC data, pubs have seen the most dramatic reduction in net numbers of -2,601. Many pubs have been shut down due to various factors one of the main ones being the variety of cheaper drinking options, for example, supermarkets discounting alcohol which encourages drinking at home. Another factor has been the increasing house prices which has encouraged pub owners to sell units to convert into housing.


Figure 2: LDC data categories to experience the highest net changes in units since 2012. (Source: LDC)

It’s no secret that at LDC, we enjoy a tipple, so for us the number of pubs closing is one of our biggest concerns! One may paint a gloomy picture of boarded up windows, but actually what is happening is that these spaces are mostly being reoccupied. 22.7% of pubs have been closed since 2012 which may sound alarming, but figures show only 3% have remained vacant and many others are being converted into units for other uses such as residential or office.

Units which formerly housed Women’s clothing stores formed the largest percentage of the total vacant units at 8.9%. Women’s clothing also saw the largest percentage churn in occupier with just under half (46.3%) seeing a change, which illustrates the volatility in this sector. Women’s clothing and other sectors have been impacted by the rise in online competition, from the likes of ASOS and Boohoo who continue to see rising sales as they eat into the market share of the traditional high street businesses. You can read more on the fashion market specifically by downloading our latest report on the fashion sector here.


Figure 3: Breakdown of unit status by retail category. (Source: LDC)

As figure 3 above shows, the majority of closures are resulting in reoccupation.

Who’s taking up these vacant units?

What is more interesting, perhaps, is finding out who is taking over these vacant units. LDC data reveals that the majority of pubs have been converted to restaurants (251), with a further 227 being converted into accommodation (hotels).

Women’s clothing stores were largely replaced by other fashion and general clothing shops, which may come as a surprise as it is the belief of many that the rise of online retail is damaging high street fashion. Gift shops were the highest non-fashion category replacing 65 women’s clothing stores. Health & beauty shops made up some of the top re-occupancy categories with beauty salons, barbers, hairdressers and hair and beauty salons all being in the top 15 occupier types.

On the whole, newsagents were replaced by other newsagents, however the most popular change came from convenience stores. McColl’s alone acquired 88 units. Other noticeable re-occupiers were independent coffee, mobile phone and vaping shops. Several newsagents were converted into residential property due to the location of these units being in densely populated residential areas which is certainly one of the reasons that the vacancy rates are remaining relatively stable.

Figure4Figure 4: A flight centre unit converted to a McColls convenience store. (Source: LDC)

Travel agents tend to remain the same and were replaced by other travel agents 69% of the time. A large proportion of these were the taking over of the Thomson branded stores by TUI.

There is no denying that there are challenges facing retailers and leisure operators who occupy our high streets. With many well-known brands falling into administration and undergoing CVAs it is understandable that people are starting to feel a sense of doom. But it is important to look at the whole picture, using data to understand and evidence the trends under the headlines. It is also key to have an understanding of why particular brands are closing, and who is taking up these vacant units, as these occupiers often provide the green shoots of growth in the market despite the raft of political, social and economic challenges retailers face today. Looking to the future, our high streets will look very different as the expectations of ‘experiential retail’ continues to develop in consumers’ minds. With this, companies will have to excel in innovation in all areas of retail and combine online and office experiences for their customers. So – is the high street dead? I say no, it’s just evolving. 

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