Online marketplaces and retail parks are often cited as the reason for the decline of the high street in recent years. Out-of-town shopping centres and retail parks offer incentives in terms of free parking and extended hours, while online shopping has even showcased one-hour delivery slots in some areas of the UK. However, have we just got bored of what the high street is currently offering?
With many retail shops unlikely to ever return to our beloved high streets ever again, entrepreneurs are looking for new ways to regenerate the UK’s high streets. With this comes a new wave of business opportunities, with bars, restaurants, coffee shops and beauty salons all leading the way. However, these industries are still facing some challenges.
The impact of the new Digital Services Tax
From April 2020, the government intends to impose a 2% tax on the revenues of search engines, social media platforms and online marketplaces that derive value from UK users. This means the likes of Facebook, Google and eBay will be required to pay this 2% on their UK revenues above a specific amount. A similar scheme has also been agreed upon in France, where the French government will tax these companies at 3%. With this in mind, could it be time for businesses to turn to physical retail space, again?
John McCaffery, Partner at business advisors Alexander & Co, who specialise in providing tax and accountancy advice to entrepreneurial companies, commented “The proposed digital services tax is estimated to raise some £440m a year by 2022-23. It is still at an early stage and therefore any impact it will have on these larger online companies remains to be seen.
“We work with a wide range of clients who have both high street and online representation. Many of these have innovative business plans for the high street. Encouraging unique start-ups and growing businesses into high street premises would no doubt help stimulate new interest in our towns and cities and help them to flourish once again.”
Is there a way back for retailers?
Some retailers have embraced the changing high street by implementing in-store experiences. Brands like Topshop and Primark have upped their game with beauty salons, cafes and hairdressers inside their stores. While some are still thriving on the high street, particularly in city centres, the decline of the small-town high street retailer has been a rapid one.
Greater Manchester’s high street revolution
A high street revolution has taken to the towns surrounding the city of Manchester, where retail is being adapted for more leisure and retail uses. In traditional high street towns such as Ashton-under-Lyne, Altrincham, Urmston and Stockport, successful food-hall markets and
Restaurant opportunities are revinenting their retail landscape. Shoppers may have once been drawn in by local traders, butchers and clothing shops, but now the opportunity to try different foods and beverages from all over the world is a more attractive proposition. This is something that the Mayor of Manchester, Andy Burnham, has expressed his support for previously, and even Prime Minister Boris Johnson touched on this during his recent speech in Manchester.
From clicks to mortar
Online retailers are also venturing out into our high streets. Earlier this year, Amazon began ‘clicks and mortar’ offering start-up businesses retail space on the high street, the first being in Manchester. More recently, The Hut Group announced the acquisition of 12,000 sq of prime retail in the same city, in the now collapsed former Jamie’s Italian premises. Click and collect is also becoming the norm for online retailers, where goods will be delivered to a store for collection, with the enticement for linked instore purchases.
What needs to be done to save the high street?
Although there are countless business opportunities for start-ups on the high street, business rates for physical retail space need reassessing, and greater reliefs need to be made available to prevent the high street from seeing any further losses. The high street is an attractive proposition for many start-up entrepreneurs, and incentives can help to further boost this.
The high street needs to give itself a makeover and reposition itself. Bringing more offices and residential into our towns and cities will lead to increased footfall and demand. Innovative solutions to provide these residents and office workers with a variety of uses, including food, drink and entertainment services will be key to revitalising our high streets and safeguarding them for the future.