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Jonathan Reynolds

By Jonathan Reynolds

Diversity and the UK’s high streets

For the UK’s High Streets to thrive in the future is not just about being big enough to withstand the ‘perfect storm’ that comes from a mix of austerity, online and out-of-town retailing. Whilst many big retail centres continue to be resilient, the most successful smaller town centres will need to be diverse and versatile, perhaps developing specialist roles. Earlier this year, we worked with the Local Data Company to analyse how our High Streets presently trade and how this has changed, over both the short and long term. Rather than simply tracking vacancies and closures, we’ve calculated a retail diversity index for every High Street. Recognising that services also play an important role in attracting shoppers, we’ve also calculated a service diversity index. And whilst sometimes forecasting large-scale store closures grabs the headlines, the reality of change as shown by data-driven analysis is not only that it is complex, but that there are some good news stories here, as well as more sobering insights.

1.         How are retail places different from each other? What differentiates the country’s 1,300 High Streets?

The OXIRM/LDC Retail Diversity Index measures the variety of comparison goods outlets present in a place, and thus the more interesting places to shop. The index  scores Bath, York, Exeter and Cheltenham highly, as well as smaller centres such as Salisbury, Leamington Spa and Chichester. Other centres lack variety, despite their size – some larger cities such as Birmingham, Cardiff, Southampton and Sheffield – but also, perhaps surprisingly, places like Cambridge, Oxford and Windsor, which have patchier coverage of some types of retail business than other, similarly sized, centres.

retaildiversityindex

Note:  The Retail Diversity Index is an expression of the presence of up to 273 categories of retail business within each centre. A score of 1.0 indicates maximum diversity. The Comparison Goods Index is based on 237 categories. The Retail Rank ranks centres by the number of retail outlets present in April 2013. The multiple comparison goods rank is the equivalent calculation for this type of business.

OXIRM/LDC Service Diversity Index recognizes that many High Streets are more than just places for shopping. A leisure services component scores highly centres with particularly strong entertainment and hospitality roles, including places like Bournemouth, Stratford-upon-Avon, Blackpool and Weston-super-Mare; whilst a consumer services component identifies centres with a particularly diverse range of services to complement their retail offer. This includes places like Darlington, Eastbourne, Banbury and Loughborough.

We also calculated a OXIRM/LDC Restaurant Diversity Index. Camden Town, Ealing, Clapham, Putney and Richmond provide greater than expected choice. But outside London, you should also be spoiled for choice in Manchester, Birmingham or Reading – as well as in either Oxford or Cambridge.

2.         How have the country’s High Streets changed?

We’ve looked back at 1,300 High Streets over the last two years and at 700 of these over the last 20 years. Over the past two years, the story is as much about a change in the mix as it is of massive across the board declines. The number of independent retailers in High Streets actually grew overall by nearly +2% between 2011-13. It was multiple retailers that were in decline – by as much as -5.2% for comparison goods multiples. The research has identified several very specific structural changes that underlie this.

multindepratiotable

High Streets have already begun to respond to the most obvious effects of online retailing. In the most vulnerable categories, where the product itself is being digitized (including computer games, CDs & DVDs, bookselling and newsagents) there has been a -13% fall in High Street outlet numbers – this equates to over 1,000 stores, both multiple and independent. These losses have been fairly evenly distributed across the country, and, whilst these categories only represented around 5% of all shops in 2011, their reduction represents a loss of diversity.

Fashion retailing has taken a particular hit. Womens’ clothing retail outlets alone have shown a net decline of nearly -6% for independents and -13% for multiples – a combined net loss of over 500 outlets between 2011-2013.

Value. The last two years has seen a +12.4% increase in value-related retailing – of over 1,100 outlets – by which we mean secondhand, discount and charity shops. There are now over 10,000 such shops in our High Streets, comprising 9% of the total.

Pawnbrokers, pay-day lenders and betting shops have attracted special political attention with Ed Milliband in particular raising his concerns. OXIRM/LDC have been tracking a so-called ‘Milliband Mix’ of these business types. There has been a +17% growth in these outlet numbers since 2011 (most notably in cheque-cashing & pawnbrokers.) But this growth is very selective: it’s not just in more traditional metropolitan High Streets (such as East Ham and Ilford) but also in smaller urban High Streets, such as Wisbech, Norwich and Penzance.

millibandmix11-13counts

Note: Categories include bookmakers, pawnbrokers, cheque-cashing facilities. The size of the circle is proportional to the net increase of outlets in these categories between April 2011 and April 2013.

Food is returning to many High Streets. Amongst independents, c-stores in High Streets have grown by +17%, whilst multiple convenience stores, driven by the interest of the major grocery brands, have grown by +8%. Independent food specialists also appear to undergoing something of a modest resurgence.

Health & Beauty. As a nation we appear to have become increasingly preoccupied with various aspects of health & beauty. We assembled a special category of health and beauty retailers and leisure service businesses (ranging from nail salons to hairdressers and from barbers to tattoo parlours). This category grew by +10.4%, or by more than 2,300 outlets over the last two years. Indeed, there are now more nail salons on British High Streets than Chinese restaurants.

The research took a more selective look back even further – a unique 30-year perspective. We’ve drawn on the analysis that Oxford did in 1984 and 1989 of multiple comparison goods retailers in over 700 town centres and brought it up to date. Whilst there is longstanding stability amongst the top ten centres, there are clear rises and falls in the list. The biggest rises include centres with new development (Derby, Milton Keynes, Norwich, Solihull and Leamington Spa) as well as, of course, wholly new entrants (Meadowhall, Metro Centre, the Trafford Centre and Merry Hill). Falls include Croydon, Doncaster and Plymouth, as well as several centres that have exited the top 50 altogether, including Sheffield (63), Swansea (61), Coventry (58) and Middlesborough (56) (Table 3).

84-13changeinranktable

 

Can we forecast the High Street’s future prospects? It would be very easy to roll forward existing trends on current assumptions. For example, if we did this to 2018 then, based on recent historic change, the number of comparison goods multiple outlets in our town centres could undergo a further fall of some -13% (some 5,000 outlets) over and above the -5% fall since 2011. Our research to date has already shown that such analysis is simplistic: the reality is much more complex, given the relative growth and decline of particular categories of business.

3.  Future research

The next phase of the OXIRM/LDC research is therefore to develop a series of possible trajectories for town centres, based on a set of assumptions about the future. Our research to date shows that many of the country’s High Streets continue to evolve to play the changing roles required of them by residents, workers, visitors and their competitive context – although not always into roles that match the expectations of commentators or politicians, perhaps fed by misplaced nostalgia rather than by the realities that some High Streets face.

 

Interested in reading more? Run the full Prezi presentation below.

 

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