A cross-party group of MPs is to investigate how to revive England’s ailing town centres which are under increasing threat from online shopping and the financial problems facing some of the biggest high street names.
The housing, communities and local government committee has invited submissions to an inquiry that will consider what high streets and town centres could look like by 2030.
Clive Betts, the Labour MP who chairs the committee, said: “Our high streets and town centres have an important social, civic and cultural place in our society. But, many of our high streets are now struggling, facing a range of challenges including the threat posed by online retailers.
“Changing trends and behaviours in recent decades – driven by a range of economic, demographic, social and technological factors – have affected the prosperity and vibrancy of our high streets.”
Recent high street casualties include Maplin and Toys R Us, while retailers ranging from House of Fraser and Mothercare to New Look and Carpetright have all announced plans to close shops and cut jobs. Many restaurant chains are also facing problems, with the Prezzo group, Byron and Jamie’s Italian all closing branches. The Cau steakhouse chain, it has emerged, could also be shut down.
The state of UK retail’s ill-health
Retailers that have gone bust 2017-18
Toys R Us: 180 stores employing 3,000 staff, collapsed 28 February. Owes £15m in VAT, due by 1 March.
Maplin: 200 electronics and gadget stores, founded 1972, also failed on 28 February.
Warren Evans: bedmaker went into administration earlier in February.
East: fashion brand with nearly 50 outlets folded in January.
Juice Corp: business behind brands including Elizabeth Emanuel and Joe Bloggs went under in January.
Multiyork: furniture chain with 50 stores went into administration in November.
Feather & Black: bedroom furniture and bedding specialist with 25 outlets fell into administration in November.
Retailers under pressure
New Look has debts of more than £1bn and has lost some of its credit insurance cover, which protects suppliers if a retailer goes bust. In the 10 months to Christmas, sales fell 11% and losses hit £123m. The company intends to close 60 stores and change its fashion ranges, but faces a struggle to win back young shoppers.
House of Fraser‘s Chinese owner, Sanpower, had to stump up £25m to see the store through Christmas and its debt is rated as junk. The retailer is attempting to reduce the size of its stores by 30% and has asked landlords to cut rents.
Debenhams, a 178-store chain that is more than 200 years old, is axing one in four of its managers and considering closures to cut costs. It has warned that profits have been hit by lower than expected sales, with profit margins also down as a result of having to cut prices to match rivals.
Sir Ian Cheshire, the chairman of Debenhams who used to run B&Q, warned on Wednesday that onerous leases in UK town centres are “killing more and more retailers”.
He told ITV News that the decline of the high street would accelerate unless the government reformed the tax system and landlords showed greater flexibility.
Cheshire said the current system, with business rates based on property values and many retailers still wrestling with landlord agreements that include upwards-only rent reviews, gave online-only retailers like Amazon an unfair advantage.
“What you’re seeing is retail facing more change in the past three years than in the previous 20 … It’s a big structural shift which is basically saying old models have to be reinvented,” he said. “If you’re starting out now you’d have much less space, much more online and much more flexibility. No one will now be signing 20-year leases.”
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Debenhams is closing eight of its 165 UK stores and is in talks with its landlords about reducing space at 30 more.
As well as examining the challenges facing high streets and town centres, the MPs’ inquiry will consider whether councils have the correct planning, licensing, tax-raising and other tools needed to help local areas.
It is not the first time the problems facing UK high streets have been the subject of investigation. In 2011 David Cameron asked the retail guru Mary Portas to come up with a plan to save traditional high streets, then under threat from out-of-town shopping centres and supermarkets moving into non-food sectors. Now, however, supermarkets and out-of-town shopping centres are also feeling the squeeze as a result of a huge change in shopping habits.
Nearly £60bn was spent via smartphones and tablets in 2017 – a figure that equates to more than £1 in every £6 spent on the high street. While the shift is benefitting online-only retailers such as Amazon and Asos, it is forcing radical change on the country’s towns and cities as huge swaths of physical retail space becomes redundant.
The committee said it welcomes the views of the public on why their high street matters and what improvements could be made.
