Coronavirus has devastated British retail. High streets are high streets because of their high footfall – footfall which has overnight become an ill-advised or illegal act thanks to governments’ (understandable and justified) social distancing rules in the UK and around the world.
This is to say nothing of the reduced spending power in any economic downturn, not least when there is talk of a global depression.
The immediate effect of the overnight death of much retail has been a boom for online retailers. Amazon has been in high demand during the lockdown, and the firm’s founder Jeff Bezos has added $24 billion to his wealth this year.
But Amazon is simply the best placed to gain in the short-term. Long-term, a new generation of entrepreneurs will fill our struggling retail spaces. Without the high costs and leveraged financing that their larger competitors are often saddled with, small independent retailers are the future of British retail.
They have an inherent regulatory advantage that no one could have predicted just weeks ago: small stores have been allowed to open first when lockdowns are eased. This has already happened in Germany, Austria and Italy. Since much of the UK government policy seems to be based on replicating what seems successful abroad, this is likely to happen here too.
With lighter rolling lockdowns expected in future, smaller stores are likely to be exempt where larger stores could be ordered to close.
This leaves larger stores with two options: create “boutiques” to allow them to survive this new environment, or give up market share to the genuine boutiques and single-site retailers.
I expect the latter to happen. Many of the millions of newly unemployed Brits will have had their confidence shaken in the perceived security of a regular pay cheque. A lot of them will be busy drafting business plans and developing products that may have sat at the back of their minds for years. Passion projects are becoming viable businesses – and it will transform how we shop forever.
Many landlords are ready for this shift too. Even without particular willingness from them, rentals will decline in the inevitable post-corona economic downturn. Faced by defaults from their tenants during the crisis, many landlords will be keen to fill their properties in any way possible. This means the removal of the stringent checks often enforced, and the opening up of prime real estate to start-ups.
Some landlords are, like me and my project art.quarter in Birmingham, even offering revenue shares for tenants, with no upfront payment from them. Although we are not on the high street and positioned differently to high street developments, I see more consumers searching for alternative local venues like these in future.
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As well as creating the kind of genuinely diverse, creative lifestyle space that I always planned to deliver to the people of Birmingham, this will make sense to consumers.
Many of those consumers will, in our new world, want more local, independent supply chains which may be seen as more secure and safe than something imported from China, for example.
A more local, green and sustainable economy may be one of the unforeseen consequences of the pandemic. I expect it to also create a more vibrant cultural and economic life for Brits – no one really enjoys strolling along a high street or through a shopping centre that purely has the same chains that can be seen anywhere else.
The age of ‘copy and paste’ high streets run by aggressive landlords is over. The future is uncertain, but I do believe it will include more of the authentic local shops that those in London or Birmingham currently have to travel to Cornwall or Kathmandu to enjoy.