Is Covid-19 Killing the High Street?
Date published:
New report Cities Outlook 2022 by Centre For Cities outlines the key shopping trends throughout the pandemic, makes recommendations for levelling up, and asks whether Covid-19 means the end of the High Street.
Key facts and trends:
- Online shopping surged at first, but then stalled when shops opened up again
- Pubs and restaurants were not the hardest hit
- Fashion was the hardest hit, with a significant shift to buying clothes online. In most cities, fashion sales remain well below pre-pandemic levels
- The food and drink sector lost an average of 37 weeks of sales in city centres
- Suburbs have not been hit as hard as city centres. As a result, the suburbs were cushioned from the worst effects of the pandemic. However, most suburbs are not experiencing a boost at the expense of city centres
- City centres that entered the pandemic in the weakest position have had the smallest hit during the pandemic. Meanwhile, affluent areas were the worst hit because their pre-pandemic strengths became weaknesses such as wider catchment areas shrinking temporarily
- There was no clear difference in the size of grants awarded to stronger and weaker places, but the lower costs in weaker places meant it will have stretched much further
- Covid-19 pushed vacancy rates up but did not trigger a large increase in empty shops
Concerns about the future of the high street are longstanding. High streets play an important symbolic role, and their vibrancy is often regarded as an indicator of local prosperity. The report explains that the performance of the high streets have not driven the economic strength of the city centres, but reflected it.
Regarding the North East, the report revealed that Sunderland had one of the highest high street vacancies in Great Britain in March 2020 with nearing a third of all high street property being empty. However, government support during the pandemic slowed down the long-term trend of high street decline in the area.
The report also noted that Newcastle is responsible for 92% of the North East’s ‘underperformance’ (gap between current and potential productivity). Combined, the underperformance of these big cities cost the national economy at least £47 billion (2.3 per cent of output) a year.
The report recommends that policymakers should focus on two things:
- Helping high street businesses to absorb the shock of the pandemic in the short to medium-term
- Enhancing long-term economic growth, assisting city centres in adapting to change, particularly by supporting their role as hubs of the high-wage economy.
In places with stronger city centres, the report encourages attracting people back as soon as it is safe to do so. This could include leisure events and greater flexibility around part-time season tickets for public transport, which would require the Government to provide revenue support to local transport bodies. For weaker city centres, on the other hand, the authors encourage addressing the underlying fundamental issues behind the lack of demand for high street businesses.
The report states that although properties are not expected to remain empty for long, policymakers could help deal with units that have become vacant during the pandemic. The authors recommend allowing alternative temporary uses for these empty properties, with local councils playing a ‘match-making’ role to connect potential business occupiers with landlords.
Other recommendations include investing in skills to create a workforce that can attract high-value jobs and the creation of a £5 billion City Centre Productivity Fund from the existing National Productivity Infrastructure Fund. It is said that local authorities should put forward bids that include a multi-year plan and aim to integrate different measures into a single strategy rather than focusing on several independent interventions. This could include demolishing or converting dated commercial space, creating new offices, or improving public transport.
Finally, we come to levelling up recommendations.
Centre for Cities has defined the targets levelling up should achieve as:
- Reducing the share of people who do not have five good GCSEs (or equivalent) to the national average of 17.8 per cent in every local authority exceeding it.
- Increasing life expectancy to the national average of 79.3 years in every local authority where the average is below that.
- Bringing all lagging places up to their productivity potential, with particular focus on raising the contribution of the UK’s largest cities. This goal should have greater weight given the impact of increased productivity on standards of living.
To conclude, while Covid-19 has turned the performance of the high streets in Britain’s cities and large towns on its head, the supposed end of the high street is not supported by the data. By September 2021, spending in brick and mortar stores had bounced back in most cities (52 out of 62) – as had offline spending in restaurants, pubs, and cafés. The report’s recommendations will not only help the high street, but look to improve the economy and overall standard of living.
Freya Thompson
Knowledge and Research Executive
Photo by Jordan Nix on Unsplash