Cambridge and Guildford top the list of the UK’s most resilient retail locations, while Ramsgate and Kilmarnock are the least, according to Cushman & Wakefield, which has ranked the viability and performance of 250 High Streets outside Central London.
Online sales coupled with rising business rates have made survival on the traditional high street increasingly challenging for retailers in the UK over the past decade. The latest Cushman & Wakefield research report UK High Streets: Dead or Alive? groups the top performing locations as well as those struggling for survival.
The focal point of the report is the Retail Resilience Index, a ranking of 250 towns based on 22 economic, demographic and retail property metrics, most of which have been tracked over a 10-year period, providing a rounded analysis of town performance. These metrics include retailer demand, leisure spend, floor space density, rental change as well as broader economic indicators such as house prices, catchment demographics, business survival rates and tourism spend.
Towns have been ranked according to each variable, with the final placing calculated from the sum of the individual rankings. Locations have then been assigned a Town Tier (1 to 5, of which 1 is the highest) based on their overall ranking, to enable a comparison with similar locations.
On an individual town basis, Cambridge, Guildford, Bath, Chichester and Oxford are the High Streets that have shown the greatest resilience over the last decade. Conversely, Hamilton, Llandudno, Newport, Greenock, Ramsgate and Kilmarnock prop up the list of 250 sites.
The report highlights a number of towns as having performed better than expected. Cirencester in Gloucestershire, for example, ranks higher than locations of equal size due to its robust performance on variables relating to the business environment as well as the Quality of Life index.
Elsewhere, despite being 71st on the list, the small town of Marlow in Buckinghamshire ranks in first place for both rental growth and retailer demand, benefitting from a wealthy, albeit small, catchment. Further down the ranking, a lack of investment and pressure from competing centres has hindered Gloucester’s performance over the last decade.
Other key findings from the report included the following:
Half of destinations in the top two Tiers are located within the South East and Greater London.
Only 19 of the 250 high street locations in the analysis recorded rental uplift over the 10-year period. In the worst-performing towns, rents have rebased by as much as 45%.
Commercial property investment volumes in Tier 1 towns were 367% higher than Tier 5 between 2007 and 2017, compared with 109% between 1999 and 2006.
Comparison tourist spend in Tier 1 towns is 694% higher than for towns in Tier 5.
House prices in the Home Counties, which account for almost 40% of all locations in Tiers 1 and 2, rose by 44% over the 10-year period to the end of 2017, compared with a national average rise of 24%.
Residents in Tier 1 towns are most likely to make a purchase online.
Leisure spend densities (£ per sq ft) are the highest in Tier 2 locations.
The number of passengers travelling through railway stations in Tier 1 towns increased by 60% over the 10-year period compared with 46% for towns in Tiers 4 and 5.
Report author Amy Gibson, Cushman & Wakefield’s Senior Research Analyst, said: “Consumer tastes and needs have evolved over time and it is clear from our analysis that some locations have adapted more effectively than others to the ongoing structural change in the sector. Consumers are willing to travel further to seek out new and exciting retail experiences, whilst simultaneously demanding greater convenience nearer to home. This creates opportunities on some of the country’s most challenged high streets to diversify beyond the traditional retail offer and explore alternative uses that are relevant to the needs of the catchment population. Essentially, it is about re-purposing the high street.”
Darren Yates, Cushman & Wakefield’s Head of EMEA Retail Research & Insight, said: “This study reveals where in the UK the High Street is doing very well and there are a number of places which are thriving. However, profitability in the online era has been a major challenge for retailers, with a number consolidating store estates to reduce costs. The selective nature of demand has created a polarised retail environment, with many operators focusing on key, high-footfall locations. For investors, this structural change has made it harder to pick ‘winning’ assets, while the blurring of online and offline has made it increasingly difficult to quantify the value of the store.
“The impact of these changes has varied widely across the 250 locations, with some towns adapting more successfully than others. The recently-announced relaunch of the Grimsey review will once again bring the issue of struggling high streets to the forefront, with fierce debate anticipated around how or indeed whether we should breathe new life into some of our most challenged high streets.”
This year alone, there have been a number of retailers announcing restructuring of their portfolios or in some cases significant closures of their physical store network.
Justin Taylor, Cushman & Wakefield’s Head of EMEA Retail, said: “Leisure operators have gone some way to filling the voids left by traditional retailers, particularly in prime locations. As well as playing a major role in extending dwell time, they also support the night time economy.
“The growing importance of leisure is also indicative of the larger structural change in the retail landscape, highlighting the need to provide shoppers and other users with alternative, non-retail attractions that will encourage consumers to engage with the high street. There are, however, limits to the extent that leisure alone can revive a location. Regeneration has a major role to play and there are numerous schemes underway around the country, from Altrincham to Edinburgh and Bracknell to Coventry, many of which have a sizeable non-retail component.”