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COMMENT | A post-retail future for North West town centres

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One sector with a presence in every town and city in Britain appears to be feeling the impact of the pandemic the most – traditional retail, write Leena Gillespie of Public Sector Plc and Andrew Knowles of Duff & Phelps.

The retail sector has experienced a tough trading environment for years. Shops were already reeling from 2019, the worst year on record for Britain’s retail sector.

When all non-essential shops shut their doors in March 2020, retail sales slid in a record decline.

The figures measuring footfall on our high streets are stark, and cities in the North West have been among the worst affected.

In April, Springboard, a data company, recorded an 83% fall in footfall nationally, with Liverpool and Manchester among the top 20 places worst affected.

In contrast, in 20 smaller town centres, including Prescot in Knowsley and Dudley, footfall decreased by less than 60%.

The direction of travel is not new. However, what the pandemic has unleashed is a supercharged, permanent shift in consumer behaviour away from the high street to online; a genie that could be hard to put back in the bottle.

As  workers continue to spend at least some of their working week at home, footfall in town centres and high streets will remain below pre-pandemic levels.

The Springboard statistics for the week commencing 13 September showed high street footfall was down 34% nationally and 43% in Manchester as people continue to work from home.

In September, the Centre for Retail Research said more than 125,000 jobs have been lost on Britain’s high streets in the first eight months of 2020, with 14,000 shops shutting.

And worse is to come, with the same organisation estimating that job losses will almost double to 235,700.

In recognising that the ‘revival’ of the high street in its traditional form is no longer an option, local authorities – many of whom are landlords – have a unique opportunity to transform our high streets for the future. Some local authorities are already grasping the nettle.

In August, Place North West reported that Trafford Council shelved its plans to find a developer to regenerate the 81,000 sq ft Grafton Centre in Altrincham, to reassess the site in light of Covid-19.

Retailers are now feeling the pressure when it comes to immediate cashflow and profitability.

There may have been a business rates holiday for many during the pandemic, but even financial support like the new Jobs Support Scheme is less generous than furlough and will be withdrawn after six months.

This means operating costs are rising at a time when footfall has significantly declined from pre-pandemic levels.

What will insolvencies mean for the high street? The short answer is that  increasing insolvencies will  escalate the risk of major store closures. There will obviously be a human cost to this as jobs are lost. More ‘To Let’ boards will go up and a sense of malaise and decay will set in. There will also be a knock-on impact on local authority landlords.

Store closures mean many local authority landlords will not only lose rental income, but they will also be liable for business rates on empty properties, insurance and ongoing maintenance costs.

Local authorities are best placed to understand the needs of their areas and their communities, not just in terms of driving footfall, but also in terms of strategic property asset management.

Now is the time for local authorities to help build a better, brighter future for their communities.

By using their own vacant properties on the high street, directly purchasing units that become vacant or incentivising others to do so, councils can take a more active role to regenerate and reshape towns and cities for the future.

In line with the latest proposals from the Welsh Government to encourage hybrid working – a combination of office and homeworking – councils can curate local flexible office spaces to reflect the shift to a more agile workplace environment and build community hubs that improve people’s access to key services like healthcare and libraries and increase dwell time.

By banning vehicles from town centres, councils like Trafford and Waltham Forest have shown what can be achieved in Altrincham and Walthamstow respectively by creating pleasant, pedestrian-friendly, walkable hubs with a strong mix of independent shops.

Replacing shops and offices with desirable and affordable homes can help revive our urban spaces by repurposing them.

Research by the Social Market Foundation found that replacing commercial space with residential property could, under conservative assumptions, create 800,000 additional homes.

In recognising that there needs to be a rethink in how high street spaces are used, local authorities can put people back at the heart of our high streets and in doing so save towns and city centres.

Just before the lockdown, Liverpool City Region’s design champion Paul Monaghan held a charette to create a new vision for neglected sites in Halton, Knowsley, Liverpool, Sefton, St Helens and Wirral.

As the Mayor of Greater Manchester, Andy Burnham, has now acknowledged: “There is a need to reimagine town centres being residential centres, rather than retail centres.

“I can see a new future for our proud outlying towns that is one of modern, possibly modular, affordable housing more closely connected to public transport, and with excellent digital infrastructure.”

Public Sector Plc LogoAs we at Public Sector Plc prepare to unveil a zero-carbon housing development to benefit residents in one of Greater Manchester’s largest boroughs we could not agree more.

  • Leena Gillespie is development manager at Public Sector Plc and Andrew Knowles is senior director, restructuring advisory at Duff & Phelps

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This is old hat thinking that still revolves around people commuting into city centres.

Town centres have a key role to play in retail and commerce alike, in a reversal of the agglomeration abomination that companies and government alike have tried to force on us for their own convenience.

What the pandemic should have shown all is that local resilience is vital, for both companies and individuals.

Big cities can thrive without sucking the life out of everything around them.

By Mike