Retail is not needed so much in today’s town centres, and investment by government will have only a limited effect on their revitalisation.
So says retail analyst Verdict, which forecasts that town centres will continue to struggle as spend is diverted online and out of town.
The government announced last week that it would accept most of the recommendations in the Portas Review of the UK’s high streets, and provide £12.8m to help the performance of town centres.
Nevertheless, Verdict expects the town centre market to fall by 1.4% to £117.643m this year.
Carly Syme, senior retail analyst at Verdict Research, says: “Though investment from the government should give a boost to the channel, changes in the retail market mean that there is less of a need for retail in the town centre, and investment will only be able to do so much.
“Instead, councils need to recognise that the role of the town centre is changing and a higher focus on leisure activities will continue. Instead of being a major retail hub, town centres will be used more to support the e-retail channel, with click-and-collect points and safe-drop boxes for customers to collect their online orders as well as satellite stores opening for customers to make online purchases.”
Syme said that the town centre channel had continued to decline despite experiencing higher levels of inflation.
“Volumes have fallen sharply as customers continue to cut back on discretionary spending, while retailers aim to improve their margins by reviewing their store portfolios to cut out any underperforming space and lower their property bills,” she said. “Those who are expanding are going out of town, where rent is lower and larger units are available, allowing for deeper and wider ranges.”
Moreover, Verdict estimates that online retail sales have grown 113% over the last five years, also attracting significant spend away from the town centre. It says the high street has been hit far harder by this than out-of-town retail because important categories on the high street such as books, music and video are well suited to ecommerce.