Some British high streets may simply not survive, says KPMG

Following the Government’s announcement of the names of the 12 towns that have secured a share of £1.2million funding in the first round of the Portas Pilots scheme, Paula Claisse, South Head of Retail at KPMG, discusses what the outlook is for those that did not make the cut:

“The Portas Review is to be congratulated for galvanising so many local communities to create an improvement plan for their High Street.  For the lucky 12 that won a golden ticket, work can now begin to put their plans into action.

“But what now for the other high streets across England, who face the same challenges, but without funding and without help?  While unsuccessful bidders will automatically be considered for the next 15 places released on the Portas Pilots scheme, communities must not pin their long term hopes for their high street on securing funding second time around.

“Instead the town teams who have worked so diligently on their bids must continue to work together.  Effective cooperation between town stakeholders is at the heart of a town’s success.

“Encouragingly some community groups have already pledged to carry out the improvements outlined in their bids, regardless of whether or not they receive funding from this central Government scheme.

“But can the tide of consumer sentiment be turned?  For many consumers the High Street is no longer viewed as the prime shopping destination, with many preferring the convenience that out of town centres and larger destination locations offer.

“We must not be blind to the elephant in the room.  The retail sector itself is undergoing fundamental structural change, as evidenced by the ongoing retrenchment of chain retailers to higher volume locations.  The demise of many troubled UK high streets is due to the proliferation of obsolete tertiary or poor secondary sites and the closure of stores by service (as opposed to retail) operators whose services are electronically transferrable and hence have moved their operations online.

“The consequences of this are significant.  We cannot simply try to recreate what we had before.

“Retail landlords must consider what to do with the empty sites blighting some town centres.  This may mean converting them back into residential use, or making them more attractive to those sectors still pursuing expansion plans such as leisure, coffee shops, convenience food chains and charities.  Local Authorities will need to be flexible when considering change of use applications, viewing them in the context of what the modern High Street looks like now, and not basing their decision on the stereotypical mix of shops that we were used to seeing in the past.

“Going forward, whilst schemes such as Portas Pilots may offer some short term fixes, the Government must tackle the underlying issues that negatively affect all retailers, not just those on the High Street.  The reform of business rates comes top of this list.  A complete rethink of the current system, rather than tinkering with reliefs as the Government’s response to Portas has done, could provide the long term relief that the retail industry desperately needs.

“It is a sad reality that not all high streets may survive, however with the right guidance, community and government support, some will evolve, changing their composition to suit the modern UK consumer and his or her local community.”