Online shopping has had a huge impact on the high street in previous years and with Christmas 2019 fast approaching, we’ve been interested to look at the impact it has had during the course of this year.
- In July the proportion of all empty shops on the high street reached 10.3%. This is the highest level recorded since January 2015.
- Whilst Boohoo bought the brand names Coast and Karen Millen when they announced closures this year, Boohoo is now only running them as online-only retailers.
- Hundreds of other stores owned by brands such as New Look, Homebase and Mothercare have closed this year, whilst their websites continue to trade
- One of the primary reasons announced for the failure of travel agent Thomas Cook in September was their lack of focus on their online offering and instead keeping stores open. In some areas, they opened new stores even with the knowledge of the debt owed and the number of customers shopping online for holidays.
- Business rates, wages and rent costs continue to rise, whilst customers look to buy online for convenience. On average each consumer will now spend £1 in every £5 online.
- Customers find it frustrating to pay to park on the high street; not only the cost, but also the inconvenience.
- Delivery companies and offerings such as Amazon Prime which deliver same or next day take away the need for customers to visit the high street, as products are also often competitively priced with discount codes to entice their sales.
- Customer tastes are changing, so want stores for the convenience items they don’t want to order online such as takeaway food, vaping and tobacco, electrical items they need to replace, pubs & bars and fashion items they want quickly.
- Banks, estate agents and charity shops also continue to hold their own on the high street, with 116 new banks, 143 new estate agents and 139 new charity shops opening in the FirstHalf of the financial year for 2019.
So what does all of this mean?
The general consensus is that the high street is an evolving place; it is no longer the only place to go at the weekend to get all of your shopping or buy your Christmas presents. There are often cheaper deals to be found online, offering convenience if not best price.
That said, the high street is not as “dead” as people make out, as there are still businesses opening new premises in key locations to serve the public needs that the internet can’t, such as banking. Whilst facilities such as online banking play a big part in our modern world, there are many who still prefer to visit a branch. There are also certain aspects that cannot be managed online, such as paying in a cheque over a certain amount.
One of the biggest threats to the high street has always been, and will continue to be, the costs faced by retailers such as business rates and rent. This, coupled with hiked parking charges for customers, serve to make profit margins smaller and sees less footfall through the doors.
Over 2019, we have definitely seen a continued increase in online retailers and the services offered, especially against the number of store and brand closures for those who found they could not compete online and afford a high street provision. That said, there have been those who have continued to flourish on the high street, which really does seem to be industry dependent rather than convenience based.
What will the future hold?
Well, online shopping isn’t going away anytime soon and will, in our opinion, only continue to increase its grip on UK consumers. The high street can continue to hold it’s own with certain establishments but to stand any chance of returning to be “the” place to be at the weekend, changes need to be made at core level by councils to reduce business rates and caps placed on rent charges, because as it stands only the big brands can afford to keep stores open with small profit margins.