Comment: What did retail and hospitality ever do for us?
Sustained pressure from the Government on the retail and hospitality sectors, with unprecedented taxes and legislation being wrought on both industries, suggests they have limited value to the economy and the broad wellbeing of society. How wrong can this be?
We all know the value both sectors play in offering the bulk of entry-level jobs to people across all demographics and parts of society within the UK. But there is also the incredible value they both provide in serving local communities on high streets up and down the country through stores, cafés, restaurants, and other service providing businesses.
Subscribe to TRBShops and food & drink providers are playing an ever more important role providing services across the country because high streets have continued to face not only pressure from governments and local authorities but the impact of structural changes – most notably the rise of digital. This has not only affected physical stores but other high street stalwarts like banks.
More than a third of UK branches have closed over the past five years, according to data from the Office for National Statistics (ONS), with the number of branches in the UK standing at 6,870 in 2024 compared with 10,410 in 2019. And there is more negative to come because the large players have earmarked another 110-plus to close before Christmas. Only Spain and the Netherlands have closed more branches as a proportion, across all European countries.
The closure of these established presences on high streets along with similar trends affecting the likes of physical Post Office branches has resulted in high streets becoming more reliant on stores and hospitality outlets to fill in the gaps. Micro-pubs are playing an increasing role in taking up former units on high streets – some of these will have been stores but increasingly former banks and building society branches. The UK is also blessed with having plenty of entrepreneurial types willing to take their chances as independent operators – running unique stores, cafés and restaurants.
While these small players toil away there has clearly been a general lack of appreciation of the contribution made by these individuals. It is arguably the same lack of value and recognition given to the large retail operators too who all contribute to keeping our high streets alive and stop the local areas from drifting into ghost towns.
There are enlightened individuals and developers who understand the broader contribution made by retailers and hospitality companies. In a recent interview for The Retail Bulletin Roger Madelin, joint-head of Canada Water at British Land, highlighted that retail is not an asset class for bringing in big levels of income so it has invariably taken a back seat in large developments.
However, he recognises it can positively affect the values of the apartments and office space in an area under development. It punches above its weight in contributing to the overall value of a development – just as it does on a high street and the surrounding housing and communities.
It is a similar story with Nick Jones, founder of Soho House, who recently opened a new retail venture, Corner Shop, which combines retail and hospitality in a grocer/café and wine bar hybrid just off The Strand in central London. I was initially surprised by his move into retail but then some weeks later I found out Jones is also involved in the nearby newly-built residential building 180 Thames. The proximity of high-end retail and hospitality is all part of his – and his collaborators – recognition that the value and appeal of the apartments for sale will be enhanced.
Let’s hope the penny drops sometime very soon with the Government and other interested bodies that the retail and hospitality sectors play a much more important role in the economy and society than simply being a piggy-bank for increased taxes and a soft target for burdensome legislation.
