Global property company, Colliers International predicts that the high street will gradually recover over the next seven years and by 2020 the number of empty shops will have fallen from its current level of 12% (of total floor space) to about 7% (a similar level to peak in 2006).
Russell Francis, a Director at Colliers International said: “This recovery will be selective with the major town centres seeing the greatest reduction in empty shops and the medium centres seeing the least.
“The recovery will largely be driven by a significant increase in the GB population (3.3 million additional people to 2020) and modest economic and expenditure growth.
“Another factor will be internet sales, which are currently about 13% of all non-food expenditure, are likely to rise to about 20% by 2020. After this, the rate of growth levels off and, therefore, online sales will no longer be as much as a threat to high street as successful retailers will have by then aligned their internet and their property strategies.”
In its Midsummer retail report soon to be published Colliers International has undertaken unique research to forecast the likely retail demand through to 2025 to try and answer that question, Is the High Street dead? According to the research there is an expectation that the net addition to town centre retail accommodation over this period will be minimal i.e. very few new shopping centres. The combination of limited new supply and continued growth in retail expenditure will lead to reduced vacancy rates and ultimately generate pressure for new town centre development.
Colliers International therefore predicts that a new wave of retail development will start in about 4-5 years’ time, the main concentration however being in the major regional centres e.g. Victoria Gate in Leeds. The north east of England will however see only a 5% increase in population and might therefore be expected to see little new development.
The greatest beneficiary of population and economic growth will be London where the population is estimated to grow by about 20%. This will fuel demand for new shopping centre development, with the only schemes currently being discussed of any significance being Elephant and Castle and Croydon.
Mark Charlton, Colliers International Head of Research and Forecasting explains: “We forecast that the long delayed recovery in the retail market will start in 2014 but be focused on the big centres and smaller conveniences locations because the internet is forcing retailers to concentrate on larger “showroom” stores in fewer locations.
“The day of new retailers entering into the UK and rolling 300 new outlets is over. The new model is to open 20-50 units in the major retail centres and to have a strong internet presence that runs symbiotically, providing the consumer with both traditional and online shopping options.”
Adam Pyrke, Head of Colliers International London Planning Team adds: “Retailers are focusing on providing an experience in their new larger stores and increasing dwell times by harnessing technology and leisure, food and beverage trends to provide an all-encompassing experience. High Streets must do the same and planning authorities have to be more flexible to create a more varied mix of uses.”
Francis concludes: “So the High Street is not dead. In some locations the prospects are very healthy, but in others intensive care is required. These will only return to health if they right size and become less dependent upon comparison retailing.”