Here’s what the future holds for high street retailers

Britain’s high streets have been the subject of much concern throughout the pandemic. Retail stalwarts like Debenhams and Topshop were toppled by Covid, footfall sank and vacancy rates have continued to rise. But for many retailers – especially the food and drink shops deemed ‘essential’ during the lockdown – the challenging landscape inspired innovation and collaboration which has breathed new life into the high street.

Home working revival

When employees were sent to work from home in March 2020, the impact this would have on their eating and shopping habits wasn’t given a second thought – but the effect has been significant. With more consumers working from home, it’s become commonplace to pop into a local deli at lunchtime or stop by the high street butcher to pick up ingredients for dinner. And although many offices will be calling their employees back into central locations in the near future, many more are opting for flexible or hybrid working models. This new way of working could kickstart a new era for high streets and local shops who will see this newfound demand continue post-pandemic.

Indeed, research by Barclays Corporate Banking found that home and hybrid working patterns are likely to boost local high streets, with 16% of workers expecting to work entirely from home and 28% expecting a part-home, part-office model. And with 40% of shoppers planning to increase their in-store spending, the bank predicted hybrid working could lead to 17,000 new stores opening over the next year.

Further research shows that independents are filling the gaps in the high street left behind by chain closures. Local Data Company’s insights found that chain grocery stores have fallen in number since the pandemic began. Across retail and hospitality venues, the group revealed that more than 17,500 chain store outlets had left high streets in 2020. This has enabled independent shops to access prime units, allowing them to capture market share left behind by the chain retailers, according to Kate Rosser, insight analyst at the Local Data Company.

Community feeling

Hybrid working and an increase in local shopping will also contribute to a stronger connection among communities. With consumers visiting their local high street shops more frequently during Covid, retailers have already built important relationships in their localities. “Independent stores are critical for local communities, as shop owners live locally and are already a part of the local community,” says Kate. “They provide a personal service that can’t be replicated by some of the larger chains. New openings of independent stores provide a sense of identity for a town and create spaces for communities to gravitate towards and spend time together.”

Another positive side-effect of the pandemic was the collaborations that blossomed between local community businesses. “As high street shops faced the same challenges, traders collaborated in combining delivery services, so our grocery delivery also included us picking up items from the chemist or the pet shop and vice versa,” says Dezi Dalton of Rye Deli in East Sussex. “This collaboration brought the high street fraternity closer, and there was a free-flow of ideas and support. It made the difference to trading figures as it was clear the community wanted to support the independent traders rather than go to the ‘one-stop’ supermarket option. By working together we were able to meet the needs of our local community with much greater ease and far more economically.”

And as all independent retailers know, shopping small means more money stays in the local economy. Research by Visa suggests that by choosing to support local and independent businesses, online or in person, consumers could double the amount of money that stays in their local community. This means local shops could play a significant role in contributing to the pandemic recovery. “While it’s too early to track the post-Covid recovery, all independent openings provide jobs and income for local communities, which will be critical for Britain’s economy to bounce back,” says Kate. “However, the key will be long-term resilience, as our data shows that independent stores tend to have a shorter lifespan than chain counterparts. Local stores will need support with social media, marketing, digital channels and product selection to ensure they remain relevant and thrive long term.”

Omnichannel presence

While many shops found success through bricks and mortar collaborations and in-person trading, there is something to be said for the digital high street, too. Tony Hindhaugh, director of London butcher Parson’s Nose, operates three sites on busy high streets in South Kensington, Fulham and Putney. “They were all very thriving hubs of activity with a varied mix of retailers” during the pandemic. Yet he acknowledged that many other retail shops that weren’t deemed ‘essential’ were not quite so lucky, and as a consequence there were a “huge amount” of shop closures after the second and third lockdowns.

But while Tony attributes some of Parson’s Nose’s success during Covid to being allowed to keep the doors open throughout, he also points to the importance of the shop’s online delivery system, which had been developed at the start of lockdown in March 2020. “This enabled us to be very agile and react to market conditions swiftly,” he said. “Those who have been able to implement an efficient and stable full online delivery system (including logistics) and fulfil it have prospered throughout the pandemic. While online sales will recoil a bit, this is a definite new business vertical for the high street.”

With consumers becoming acquainted with online shopping out of necessity during the lockdown, it’s no surprise that the habit has stuck and many now want to order their speciality food items from the comfort of their homes. “The most positive outcome for us during the pandemic has been all the time and effort put into developing our website,” says Mark Kacary, managing director of The Norfolk Deli. “This has paid off, with levels of online sales higher now than they were pre-pandemic.”

Dezi of Rye Deli also found success by catering to the online crowd. “As a food retailer we took ‘out of the box’ thinking to ‘in the box’ thinking, as did many restaurants and eateries sending out their wares in convenient hampers. This was in addition to increased home delivery service for larder and general shopping,” Dezi said.

What’s next?

Will there be a place for both online and physical retail in the future of high street shopping? Tony believes so. In fact, he envisions physical retail stores becoming showrooms for businesses while online quickly progresses to be the preferred retail venue. But he is still optimistic about the future of the high street. “There will always be a need for a physical store, as the experience is one that cannot be replicated online.”

The Norfolk Deli’s Mark agrees. “Department stores have been replaced by virtual department stores such as Amazon, but ultimately the way the public has been desperate to get out of the house to socialise is a perfect indicator that the high street will evolve rather than die. It might be correct to say that the high street we know today or have known in the last 10 years will die, but it will be replaced in the same way that the high street of 50 to 60 years ago was replaced by what most people know now. Life, businesses and high streets change, which in many ways is probably a good thing.”

The growth of community support and local shopping seen during the pandemic is also a testament to the importance of bricks and mortar retail and its place in the future. “The high street has proven its worth and value during the pandemic,” Dezi said. “Customers came to realise the value the ‘small shops’ provided. They experienced the difference of personal service over online or big supermarket deliveries. When delivery slots from supermarkets weren’t available and produce and products were scarce, the independent retailer, forever resourceful, always met, if not exceeded, expectations. The consumer was ‘brought back’ to the high street and that renewed loyalty has been sustained for now – and hopefully a long time ahead.”

Image: courtesy of Parson’s Nose