High Streets are changing

The rate of decline for retail on traditional High Streets was accelerating even before the pandemic as more people were buying online. Internet sales peaked at 37.8% in January 2021 during the second full lockdown; in October 22 this had fallen back to 26% – good news but that is still 5% higher than in October 2019, before COVID. Physical retail businesses have to combine with an online offering to continue to survive.

The government changed planning laws in late 2021 introducing a new class, the E class which includes shops, offices, cafes, restaurants, surgeries, gyms, and other health and leisure etc. making it much easier to swap a unit between business types. This has had a big impact on the number of hospitality businesses opening on Putney High Street – as previously it was a protected retail street and had a cap on hospitality (previously known as A3 class) at 30%.

The BBC have analysed 1.5 million records held by the Ordnance survey of town centres across the country – they found that British High Streets have changed from a place to buy things to a place to do stuff – people no longer want to shop like they used to but instead want to get their nails done, and meet people for a coffee or a cocktail. This has an impact on which businesses will survive and thrive.

Using the BBC data looking at the Putney post code:

Eating & drinking: in March 2020 compared to March 2022 – 5% increase Across GB a 4% increase

Retail – decrease of 7%, across GB 3% decrease

Putney High Street has fragmented ownership with a large number of different landlords. It is not like a shopping centre or even like Regents Street where all properties are owned by one company and the offer can be curated. It is difficult to influence landlord decisions as they generally go for the business that offers them the most money and has a strong covenant behind them.

Business success is fundamentally supply and demand. We have had some popular brands in the past – River Island, Office, Jigsaw, Benetton, Jojo Mama Bebe – but they have not made enough profit to justify staying. That could be not enough people spending money with them or it could be costs are too high or a combination of the two. Rents and rates on Putney High Street are very high.

Putney did not lose many businesses during COVID but clearly many had depleted their financial reserves, they may now be paying back loans and rent arrears and were clinging on  – we added in the increased cost of energy, supplies, labour coupled with the drop in consumer confidence and spending, and we may see some more closures over the next six months.

According to the British Retail Consortium – business rates is the deciding factor when looking at rationalisation of estates. Recent closures – both Sean Hanna hair salon and Bills restaurant fell into this thinking with branches in neighbouring town centres. The Business Rate review coming in April 2023 has reduced business rates for some retailers in Putney, some in Putney Exchange by up to 40%. That will make a significant difference to operational costs.

We have higher vacancy than ever before and we are concerned. We have commissioned a report to analyse the local demographics and spend. We plan to establish where we have gaps and look for potential businesses which could be attracted to Putney.

A very important point to remember aside from our vacant units we have lots of wonderful businesses in Putney. They have survived Covid, shown incredible resilience and now need your support more than ever.

(Nicola Grant prepared the above to present to a meeting of residents on Tuesday  24th January 2022)

Photo uploaded by Nellie Wombat on Pinterest – no copyright intended.

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