How the COVID-19 pandemic could save town and city centres
Bangkok-based researcher Mark Azavedo makes a case for residential, educational and leisure facilities to inhabit vacant stores, in order to revive central locations.
With bricks-and-mortar retail severely hit by COVID-19, vacant stores in city centres should give way to residential, educational and leisure facilities as part of greener, cleaner and more pedestrianized redevelopments, argues Mark Azavedo, a Bangkok-based researcher. Azavedo has been working at Thailand's Shinawatra University to investigate pop-ups in retailing, third places and artisanal production.
Problems for high-street and main-street retail long pre-date COVID-19. By 2017 13.3 per cent of UK shops were already empty. There can be staggering levels of local variation – in 2011, English port city Hull reported 24.5 per cent of shop vacancies in its centre and London borough Wandsworth 34 per cent. The American bricks-and-mortar retailing environment has been especially challenging since around 2015, with early branch closures from major names such as Macy’s and Sears.
Two factors have, for many years, adversely impacted locations in town and city centres. There was the early movement of shops to out-of-town retail parks, in addition to the suburban shift of public facilities like local government administrative centres and hospitals. A large numbers of workers – shoppers themselves – thus moved away. Welsh town Aberystwyth poses one such example. Its Ceredigion County Council offices shifted from a central location in 2009 and its university, the largest employer in the community, became an out-of-town campus in the 1960s. The migration of these two main employers was hugely negative to organic footfall in the town centre, which was truly hollowed out as a result.
One might wonder why people would commute to shop in the town centre. The trend showed movement toward the car and retail park, which included locations of larger, more attractive supermarkets – these new supermarkets acted as anchor stores for a constellation of retail premises on the site.
Governmental responses to the COVID-19 pandemic have been profoundly problematic for bricks-and-mortar retail
Permanent store closures
In addition to shopping less centrally there came to be a second pressure on town-and-city centre retailing: online marketplaces. As early as January 2008, internet sales were 4.2 per cent of UK retail sales, adjusted by season. In recent months, governmental responses to the COVID-19 pandemic have been profoundly problematic for bricks-and-mortar retail. Forced suspension of retail trading has occurred – some businesses were deemed too high risk to stay open, whilst others were marked inessential and ordered to close. Non-essential businesses often included apparel retailers. Furthermore, residential lockdowns limit movement, keeping people indoors, while social distancing and sanitation requirements have made physical stores unattractive environments.
The overall outcome has been permanent shop closures, bankruptcies and bankruptcy protections. In May 2020 alone famed US names JCPenney, Neiman Marcus and J.Crew went into bankruptcy protection. In the UK, March casualties included Laura Ashley, Lombok and Brighthouse. Kath Kidson appointed administrators in April, as did Oasis and Warehouse. May casualties included Antler, who went into administration along with Aldo (UK); Monsoon Accessorize went into administration in June, as did Victoria’s Secret (UK). Straightforward store closures must not be forgotten. June, for instance, saw the announcement by Inditex of closures of up to 1,200 stores across its Zara and Massimo Dutti estate.
Having moved online, consumers may not shift back again to physical stores
A perfect storm for offline retail
The concomitant of the problems in bricks-and-mortar retail through COVID-19 responses has been a startling increase in online purchasing. Data from the UK’s Office for National Statistics for April and May 2020 shows that online sales as a proportion of UK retail sales (seasonally adjusted) were 30.8 per cent and 33.4 per cent respectively. In May 2020 the proportion of textiles, clothing and footwear sales was 49.4 per cent and food 11.3 per cent. Emarsys’ report revealed that online retailers experienced a 68 per cent year-on-year revenue growth in the American market as of mid-April 2020. Business Insider Intelligence found that 41.8 per cent of those buying groceries digitally as of 1 March had not done so prior to the pandemic.
Having moved online, consumers may not shift back again to physical stores. It looks like the survivors may be those who go multi-channel as well as those who accentuate or develop their internet-retailing capabilities, including the introduction of click-and-collect services. British retailer John Lewis confirmed that 50 per cent of online sales were collected in-store, solving last-mile fulfilment with the benefit that customers make additional purchases while in-store. The International Council of Shopping Centres found this figure to be as high as 61 per cent of customers. And, recently, The Guardian reported that the owner of John Lewis and Waitrose is ‘exploring turning its surplus retail space into affordable housing as the growth of online shopping forces it to close or scale back stores’.
Using central stores as showrooms could be key
Driving the relevance of bricks-and-mortar retail premises in this way is a positive for retailers, but the collection points are often out-of-town stores. Using central stores as showrooms, however, could be the key.
The statistics to date seem to indicate a perfect storm for offline retail. Empty retail space will be added to, perhaps substantially. That and past neglect must be addressed immediately post-COVID, which means stakeholders must gather and plan now for a sustainable, balanced future for town and city centres.
Moving beyond itinerant footfall
These stakeholders must include commercial property owners, surviving retailers and local authorities – especially their planning departments. Servicing teams may be charged with provision of education, social care and leisure facilities. Involvement of parties looking to become commercially engaged, notably developers, is important, and likewise local institutions such as universities and hospitals, which may aim to become a part of future-orientated change in the area. Consumer groups are the final part of the puzzle. These might be residential property owners, leaseholders and tenants and relevant local groups, such as heritage groups and town area groups.
Seizing the relative opportunity of the pandemic means seizing the opportunity for sustainable central development
Inclusivity is essential, but possibly easier to say than to achieve in the uncertain post-COVID environment. Ownership of town centre property and leases may become unclear – and potentially bogged down in legal action. Re-Leased reports landlords collected just 14 per cent of retail premises’ commercial rents in the UK on 24 June, the quarters' rent date. The previous quarterly date, 24 March, had 41 per cent of rents outstanding after 60 days. The actual value of commercial property will be very hard to determine post COVID-19.
Seizing the relative opportunity of the pandemic means seizing the opportunity for sustainable central development. All too often centres have only benefitted from itinerant footfall from occasional commutes and tourism. The imperative is make these hubs more liveable – including making provisions for people to actually live in them.
From retail to residences
There will be an embrace of the cleaner, greener, and more pedestrianized community. Residential developments can colonize the premises previously dedicated to retail that have become surplus. That being said there must be careful planning and action to retain proportional, relevant retail capacity for a new residential population. Additionally, proportional public facilities, like local health centres and pharmacies, and leisure facilities, like neighbourhood urban parks, must be established. In essence this would create urban villages. Wales’ City of Swansea Council, for example, has an extensive redevelopment plan, the major aim being to bring people back to living in the centre, becoming part of a 24-hour economy. Three large areas have been earmarked for a variety of residential and commercial environments.
The survival of town and city centres will take more than a few pop-ups or singular retail or residential solutions. Sustainable, maintainable futures require more: perceiving the city centre as the core of the city’s total ecosystem. As ecosystems, cities can be surprising in their speed of change and equally, their lack of change. This can produce massive divergence.
The survival of town and city centres will take more than a few pop-ups or singular retail or residential solutions
Centres are dying, but public transport systems still use them as hubs. Those systems are ever more important as demographics age, fuel prices rise and as we become more concerned about our environmental impact. We are moving beyond the age of the car: how do you reach a hospital in an outlying suburb by way of a central transport hub? Shouldn’t that hospital be brought back to the centre, with the same applying to libraries, arts and cultural centres and local authority office – all in vacated retail spaces?
Completely new public facilities might also be created. For instance the adventurous regeneration of Fremantle, Western Australia has seen the advent of Notre Dame University re-colonizing the high-street area, using an array of heritage buildings in careful liaison with city planners. The university has 6,400 students and has contributed to both day and night-time economies in west Freemantle.
Sustainable, maintainable futures depend on perceiving the city centre as the core of the city’s total ecosystem
Nothing I have mentioned is mutually exclusive. We simply have to be open-minded and flexible. In fact, considering the wider city has been Swansea’s approach. Included in the plan is a 3,500-capacity indoor arena, a hotel and a new inner-city park. Slightly further out of the centre will be a large leisure development at an old copper works, perhaps based around a whisky distillery, and with facilities like gondola rides for children.
There’s a suitable conclusion in the words of Swansea City Councillor Robert Francis-Davies: ‘Retailing has changed so therefore you’ve got to have the leisure attraction, people living and working in the city to make it a vibrant city’. We now have to hope others agree and take action.