What will happen to all of Britain’s empty high street shops?
While the Covid-19 pandemic has affected trading in all retail destinations, including high streets and retail parks, shopping centres appear to have been hit the hardest.
With government restrictions in the UK dictating that consumers had to wear a face covering in indoor spaces, and with the Covid virus being more transmissible indoors, shopping centres had arguably become a less desirable place for shopping.
Clearly the aftermath of the recession created more savvy and cost conscious consumers resulting in a large number of independent and multiple retailers struggling to stay afloat or worse still going into administration. We have seen the virtual shopping experience continue to compete with physical stores as retailers look to the internet to grow sales and improve margins. Evidently the role of supermarkets continues to evolve, with a greater diversity of goods and services being offered from a larger number of locations and range of formats, both in and out-of-town.
Shopping centre owner Hammerson has been reducing the number of Debenhams stores in its portfolio since before the crisis. In Reading and Croydon, units once filled by the chain have been taken by fashion retailer Next, which has outperformed most high street rivals through the pandemic. Hammerson has also had some success in re-leasing Debenhams units at its out-of-town retail parks, a relative winner over the past year.
Potential new tenants include discount stores B&M and Home Bargains, as well as fashion brands that have performed better during the pandemic, such as Zara, Mike Ashley’s Fraser Group and JD Sports, which last week announced plans to raise almost £500m as part of an expansion drive.
One solution for ghostly town centres is “experiential leisure” companies, which are betting on pent-up demand for social activities when lockdowns end. The 80,000 sq ft former Debenhams store in Wandsworth, for example, has been taken on by the trampoline company, Gravity, in a £4m joint venture with the landlord Landsec and investment company Invesco. The site will have a Japanese-themed electric go-karting area, bowling lanes, pool, darts and crazy golf. Another potential possibility is that dead shops and restaurants are reborn as flats. The government is considering rolling back rules on commercial-to-residential conversions — a controversial move that opposition groups say risks littering high streets with low-quality housing.