21st Century Retail Policy: Quality, choice, experience and convenience

Sep 13, 2013

Policies intended to revive Britain’s ailing high streets are raising the cost of living for hard working families by at least £1,000 a year.

Town Centre First, a policy introduced in the mid-1990s, was intended to support the high street by limiting out-of-town shopping centres. It has, however, decreased competition between retailers and damaged the social fabric of many communities, especially outside the South East. Between 2000 and 2009, 15,000 smaller town centre-stores closed despite the policy.

Discriminating against out-of-town outlets has also pushed up prices. This is particularly damaging for low income households. Academic studies show Town Centre First causes productivity losses of between 25% and 45% due to restrictions on the size of a store, its configuration and its location. A 25% loss in productivity in just food and clothes alone cuts the average household income by at least 3%, or around £1,000 a year. The real cost across all goods and services will be even higher.

The report also cites the rise of the internet as the key factor in the decline of many high streets. The share of people shopping online has quadrupled in just six years and continues to grow rapidly. Analysing existing data on the performance of high streets, the report notes that retail destinations need to be attractive, well run social hubs in order to retain customers. A trip to the shops is increasingly a social experience with a poll for the report showing that 68% of people visit out-of-town centres with other people, but a majority of high street trips are solitary.

The report proposes replacing Town Centre First with an Access First policy. This would focus on giving low income households access to social and retail hubs, but not restricting where these retail centres should be built.

The paper recommends:

  1. Well run councils or high streets with attractive features should be left to their own devices as they already cater for local demand.
  2. Councils which preside over poorly run high streets but which have the potential to flourish should have their powers removed and transferred to management companies consisting of people with retail experience. These companies would effectively replicate the way large out-of-town (Meadowhall) or in-town (Westfield) outlets are run, taking over key decisions on issues such as parking, wi-fi facilities, change of use and the location of ATMs and public toilets.
  3. High streets that are small, badly located and have little to no chance of competing with the internet and other retail destinations should be transformed into housing or office space.

Testimonials

“We have got to look at everything we can do to support our town centres and small retailers, and we will look seriously at this proposal”
Matthew Hancock MP – Minister for Skills

Author

Alex Morton

Alex Morton
Head of Housing, Planning & Urban Policy, 2010-2013 

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