Technology, stagnant wages and inflation threaten the future of the British high street

For the sake of the high street, we need to get out more: either that, or local councils need to think hard about allowing more shops to be converted into flats

Huge retail developments are still looked on by desperate development agencies and local councils as the quick fix for any devastated post-industrial landscape – but it hasn't worked (PA)

Imagine a high street populated only with the many retail and leisure groups who have recently run into some sort of trouble or required restructuring or retrenchment. You could, in this fantastical mall, stroll past some very well-known names: Moss Bros, Prezzo, B&Q, Bargain Booze, Wine Rack, Maplin, Mothercare, Carpetright, Claire’s Accessories, New Look, Next, Toys’R’Us, Byron Burgers, Jamie’s Italian, House of Fraser, Marks and Spencer and Debenhams. At the end of your long walk you might find yourself next to a substantial corner lot occupied by one of Vauxhall’s car dealerships, a third of which are now set to close.

Depressing, yes, but hardly a novelty. For years, if not decades, banks, post office and pubs have been disappearing, much to the distress of many communities. Still, the scale and pace of the current crop of casualties seems exceptional, as well as the dearth of replacement activities. Where once the ex-banks could be readily converted into pubs, and a variety of often innovative bars and restaurants promised to breathe life into streets abandoned by traditional shops, now even those hopeful trends have been reversed.

Of course the various companies have widely varied reasons for their problems, and those problems vary from mild overexpansion to calamitous debt and pensions obligations to strangely overlooked tax bills; yet together they symbolise the crisis on the high street. And the word “crisis” is justified.

There are common, and familiar, problems. The squeeze on household incomes, with near-stagnant wage levels and bouts of relatively high inflation, has lasted since the financial crisis began a decade ago. Even with the British shopper’s ingenious way of defying financial logic, and despite the Bank of England's attempts to put cheap money into borrowers’ pockets, sooner or later there was bound to be a correction.

While the money flowing into the high street has hardly risen, the supply of everything from cupcake stands to sandwich outlets to classic vinyl has been expanding, pushing rents and wages higher. Huge retail developments are still looked on by desperate development agencies and local councils as the quick fix for any devastated post-industrial landscape. Once again, sooner or later this vast overcapacity was going to run into the reality of weak demand. No matter how smart the store or niche the outlet, when overheads aren’t being covered by healthy sales, the future is bleak.

Brexit, too has played its part; the fall in the value of sterling after the 2016 vote pushed inflation higher for a year, raising the price of goods bought wholesale and damaging the buying power of household budgets. Even so, it would be foolish to ignore the effect on wage costs of well-intentioned government policies geared to foster equality and social justice. A higher living wage, the compulsory workplace pension and the apprenticeship levy are all excellent policies in isolation, and have helped those at the bottom of the income pile. Yet the effects of higher wages bills on retail and leisure businesses cannot be deined. Nor can the effect of increased council tax bills.

Overarching all of that, however, is the digital revolution, with behemoths such as Amazon invading new retail sectors. Less well advertised is the simple trend among the British towards entertaining and making the most of their leisure time in their very expensive homes. Why go to a public house or a restaurant when your private house is just as entertaining and where virtually any pastime or product can be transmitted via satellite, web or cable technology, and a cheap takeaway delivery and a bottle of wine are just a couple of clicks away?

Britain famously was once disparaged as “nation of shopkeepers”, small-minded merchants with narrow cultural and political horizons. Then the British became notorious as a “nation of shoppers”, small-minded consumers with narrow cultural and political horizons, as well as an almost reckless taste for debt and disregard for saving for the future. Now the British are becoming a nation of snug home-lovers, with pizzas arriving by moped and with a wireless hub for cosy nights in. For the sake of the high street, we need to get out more: either that, or local councils need to think hard about allowing more shops to be converted into flats. Then the British could become a nation of ex-shop dwellers, even if their cultural and political horizons remain as narrow as ever.