The retailer is dead… or is it?
We still need to buy things – food, drink, clothes, furniture… And we still want to buy things – coffee, cake, books, technology. What has changed, of course, is our ability to now buy things from the comfort of our homes, without needing to head out into the cold. As legal advisers covering retail property law,we believe we are well placed to understand the challenges retailers are currently facing.
So what do retailers need to do to get us out of the house and into their shops? This is one of the questions Mary Portas was tasked with when David Cameron asked her to undertake her review into the high street, back in 2011.
Portas’ recommendations in her report, The Portas Review focused upon retailers (as expected) and her suggestions revolved around helping independent retailers by cutting red tape, introducing flexibility around rates, disincentivising landlords from holding onto empty properties, creating strong leadership at council level, and free parking.
And the so-called ‘Portas Pilots’, twelve towns given a share of £1.2m, government support and access to Mary Portas have not quite delivered what was hoped, with almost 1,000 shops closing between 2012 and 2017, a drop of 17%. Even Portas herself has criticised the project as a ‘weighted PR campaign’ and complained it had failed to kickstart growth.
And what many commentators now accept as received wisdom is that instead of pure retail, the high street needs to transform into a leisure and entertainment destination – somewhere we can spend money not on essentials, but on experiences. And looking beyond the high streets, to some of the UK’s most successful town and out-of-town centres, this is exactly what is happening. The majority of shopping centres now blend retail units with food and drink outlets, either providing complementary offerings away from the more traditional ‘food hall’ experience, or losing the food hall entirely.
The bigger shopping centres have, of course, always blended entertainments with shopping – for example placing cinemas, bowling alleys or even, in the case of the Metro Centre in Newcastle-Upon-Tyne, a fun fair, at the heart of the action. And now others operating on the high street are starting to see similar moves. The Altrincham food market is a great example of independent retailers coming together to create an experience, a ‘sticky’ concept that keeps people on that particular high street for as long as possible; encouraging them to spend upon the enjoyable experience of good food and drink, and ideally also persuading them to purchase food and goods to take back home.
In addition to experiences, or perhaps complementary to, there is still a need for shops that people want to visit, to buy products they perhaps can’t buy online, or that they want to see in real life. Commodity goods are so easily purchased online, but hand-crafted, individual, bespoke or rare items can translate into ringing cash tills on the ground, as long as there are other complementary shops and entertainments in the locality to attract customers in the first place.
So, recognising the changes afoot, what can be done to help out high streets? Here at Ratio Law we obviously don’t have the same budget and insight as Mary Portas, but we do have many years’ experience in retail property law, helping retailers with their property requirements. Our recommendations are:
1. Increase flexibility.
The typical high street’s requirement for retail units has declined. Within minimal bureaucracy allow buildings to be repurposed for offices and residential developments; people living close to nice shops will be inclined to use them.
2. Review rates changes.
In 2017 the government revalued property for the first time in 7 years. And whilst this reduced rates for many retailers outside of the major retail centres, those with larger retail units in the busiest areas faced large hikes as a result. Ironically one of the major beneficiaries of the move was online retailers, who tend to locate their warehousing units away from the major centres. If the government truly wants to support the high street, it may now need to review its treatment of the online giants vs traditional high street retailers.
3. Devolve powers.
Local councils need to be given the power to self-determine and be creative in their partnerships with business leaders, landlords and business people. Give them the ability to develop retail and entertainment destinations and match ability with funding.
4. Encourage local entrepreneurs.
Anybody taking a risk and setting up a business that could benefit the local high street should be supported, and their exposure to risk minimised. Support could include seed funding, mentorship or reduced rents or rates.
5. Accept this is a period of re-adjustment.
One thing that strikes us is that things are always changing, and that the experiences we are going through with regards to the high street are simply indicative of the moving requirements of the public. The high street will never truly ‘die’, it will simply change, as it has changed many times in the past. There will be winners and losers, but ultimately the next few years will lay the groundwork for a new, hopefully improved high street experience for retailers and the public alike.
Retail property law experts: Ratio Law
Here at Ratio Law we have extensive retail property law expertise, with many years’ experience providing strategic legal service to retailers looking to relocate, enter new premises, expand or re-negotiate – we manage complicated legal transactions relating to retail property including conveyances and leases. We are experts in retail property law, having worked with retailers Bench, The RealBuzz and many more over the course of the past 20 years.
If you are a retailer requiring commercial property advice, get in touch with Ratio Law partner Joanna Norris for an initial chat on firstname.lastname@example.org or 0161 464 9543.