The varied commentary from retail and finance experts leaves questions on whether the high street is making a comeback. In 2017, can we expect to see less online shopping and more retail shopping on the high street?
Of course, we have all seen the result of fewer footfalls on our high streets, with over 25,000 town centre stores closing in the last 14 years. According to the PwC and Local Data Company, 2,656 outlets closed on the British high streets in the first half of 2016 – an astonishing rate of 15 stores a day shutting up, well, shop.
Along with the closure of beloved BHS stores across the country, it’s difficult to see the positives for the high street, especially when the number of online-only stores has been increasing unequivocally.
Brexit and the high street
How Brexit is expected to affect the high street has been under speculation since June 2016. Prior to the referendum, there were predictions of an immediate fall in economic figures with a huge impact on the UK economy and eventually, consumer habits.
Data from the Office of National Statistics contradicts these decreasing claims with an increase in retail sales of 6.2 per cent. With a rise in employment, accompanied by an earnings growth of 2.3 per cent, it emerges that Brexit has acted as a catalyst for those to spend on the high street.
However, much like the shifting opinions of Britain’s tumultuous exit from the EU, economic statistics have similarly appeared to fluctuate, concerning customer spending. BDO’s High Street Sales Tracker has identified a 0.1 per cent drop in retail sales across the 2016 Christmas period, whereas it has seen online sales rise by 19 per cent.
Therefore, are people more likely to shop from the comfort of their own home than hit the shopping malls or high street stores? Granted, the warm weather and school holidays may have some part to play in the increased summer sales. Nevertheless, the variation of retail sales data leaves us still pondering the lasting high street impacts of leaving the EU.
Major retail giants such as Tesco have done their best to give us their predictions of the retail vs online battle. Due to the financial uncertainty regarding the devaluation of the pound in the immediate days following the Brexit decision, they have threatened to stop selling some of their successful brands including Marmite, online.
It seems that large corporations were indicating a further death to the British high street. Ultimately, uncertainty masks the retail landscape following our political separation from Europe, thus rendering forecasts of consumer spending tenuous and a challenge to conclude.
Online retailers with high street presence
Despite financial uncertainty surrounding the British high street, the success of some stores remains to be evident. We at Hitchin-based menswear retailer Brother2Brother will soon open our ninth store, which speaks volumes about our growth as an independent clothing retailer.
In addition to the offline business, our online presence has grown also. The website saw a revenue increase of 5.21 per cent from June to September 2016 related to the previous period, and a 10.10 per cent increase in online revenue compared to the previous year.
Although figures indicate that Brother2Brother’s target audience is still likely to buy online, and are increasingly doing so, it queries whether they and other consumers also visit their favourite physical stores around the rest of the country?
The number of people visiting the high street varies regionally, with Ipos data showing that Newcastle-upon-Tyne is a city seeing a 9.95 per cent decrease in shopper numbers, followed by Stoke-on-Trent which is down by 8.1 per cent.
Comparatively, areas such as Ashford in Kent, Epsom in Surrey and Crawley in West Sussex are home to the best performing shopping centres. Some argue this correlates with the north/south divide in consumer economics, with those who earn more nearer London, splashing out on the high street.
Thus, is it possible to say that the humble British high street is making a comeback? It’s currently a tough market out there, with high street shops under pressure due to their customers shifting to purchasing their stock online rather in the physical outlets.
According to Deloitte, the retail sector will see challenges such as rising staff costs, depreciation of sterling and increases in business rates during 2017.
For high street shops to see acceleration in footfall and to regain some of their hold on the market, they should improve their overall responsiveness to changes in consumer habits, and dedicate some of their strategy focus on the digital customer.
Steven Hall is buying director at Brother2Brother