UK high streets rebound from Covid curbs as London falters
High street sales are now higher than before the Covid-19 pandemic in the overwhelming majority of UK townships, a Financial Times analysis of consumer data has found.
The recovery came despite renewed government coronavirus restrictions over the winter and collapsing spending in stores in central London.
In around three-quarters of Britain’s 368 local authorities, in-person sales to UK customers in January were higher than two years earlier, despite new rules introduced to curb the spread of the Omicron variant. In the average local authority, spending in January was 4% higher than in 2020.
As all parts of the UK remove their remaining Covid restrictions, civic and business leaders are looking for clues as to which parts of the changes caused by coronavirus are permanent.
Much of the spending has shifted online, commuting has decreased, and consumers have opted to shop closer to home, but it’s unclear how temporary this is.
These effects have proven less difficult for medium-sized cities with small retail and service sectors. The best performing urban areas were Hamilton, Blackpool, Sunderland, Shrewsbury and Barnsley in January, where spending rose more than 10% from pre-pandemic levels.
Among the largest urban areas, Liverpool in the North West proved the most resilient: sales in January were 8% higher than in the same month two years earlier, despite the imposition of Plan B measures , including a recommendation to work from home if possible.
On the other hand, London is facing serious questions about the future of its economic model. Sales in the capital are still 10 percentage points below their pre-pandemic levels, due almost entirely to losses in the very center of the city, which relies heavily on shoppers and shifting workers.
In the City of London, retailers’ in-person receipts in January were 55% lower than in January 2020.
The data suggests lower spending in the region due to Plan B, which was announced on December 8. However, by November sales were 35% below their pre-pandemic levels, suggesting the city’s problems may be more permanent, as it was struggling before Plan B.
In Zone 1, the transport fare zone that covers central London, spending was 30% below pre-pandemic levels – a gap that stood at 15% in November.
This model contrasts sharply with the outer peripheries of the city in the suburbs, such as Zones 3 through 6, sometimes referred to in local politics as the “doughnut”. Sales on high streets in these areas have held steady at 2020 levels since the end of full restrictions in July.
The city’s outskirts are generally less dependent on tourism, itinerant shoppers, and commuters, and have benefited from some of its residents staying, working, and spending locally.
The problems in central London, however, are unlikely to stay there as it is so important for jobs. Rachael Robathan, leader of Westminster City Council, said the West End, home to some of the capital’s best-known shopping and nightlife areas, “supports one in eight jobs in the capital”.
Andrew Carter, Chief Executive of the Center for Cities, said: “The fundamentals of London’s success remain, so in the medium term I expect the city to recover, adapt and grow, but the short term might just be bumpy.”
He added that despite London’s wealth, the government should pay attention to the city’s problems.
The FT’s dataset is based on the spending of a sample of UK banking customers and records card transactions at merchants whose card payment machines are linked to a geographic location. The data was shared by Social Investment Business, a regeneration charity.
Hazel Blears, SIB Chair and former Local Government Secretary, said: “The solution to London’s problems is not to return to a world where everyone has to travel to the capital to sit in an office. It’s to help London adjust to the fact that people have realized they can work remotely in the places they really want to live.
The less populated regions of the country have also benefited at the expense of their neighboring cities. East Lothian, which runs along the east coast of suburban Edinburgh, remains the best performing local authority, with spending a third higher in January than two years ago.
East Lothian benefited from a number of factors. International travel restrictions drew Scottish visitors to the area, while the location effect meant commuters passed through their hometowns rather than Edinburgh. In addition, the neighborhood has small traditional shopping streets, a factor associated with better results.
A consistent trend in the data is that high streets with smaller stores tend to do better, as they are more likely to be in mixed-use areas surrounded by housing and dependent on hyperlocal commerce.
Councilor John McMillan, spokesman for East Lothian Council for Economic Development, said: ‘A strong community spirit has played its part in supporting local people to local businesses.
But the data revealed a bigger beneficiary of the pandemic than any geographic area: online retailers. Even among consumers over 75, the group that shop the least online, online sales have risen from 22% of pre-pandemic sales to 31% in January.
Torsten Bell, chief executive of the Resolution Foundation think tank, said: “There is a redistribution between the main streets here, from city centers to residential areas, but the bigger picture is that the pandemic has also accelerated. the long-term decline of the high street because it pushed consumers online.
“High streets need to become more in-person services and less retail,” he said.