Tim Garratt, head of asset management, Innes England
The Portas Review is a non-event, despite the self-declared Queen of Shops declaring a “crisis point” in our high streets in the second paragraph of her 55 pages. Most of my clients haven’t bothered to read the report and many of my friends and colleagues have not heard of it. It will languish on the shelves, despite her saying it won’t because she makes recommendations “that won’t please everyone”.
I have nothing against Ms Portas, but this is a piece of work that could have delivered so much more.
There are lots of fatal flaws. One is in the third paragraph, where she states that the report “is not about pointing fingers of blame”. Well, we do have a strong hint that some supermarkets and out-of-town stores might actually be to blame for the decline of the traditional high street. However, for fear of upsetting them, we don’t go there.
It’s not complex Mary – the giant supermarkets at the edge of our towns are to blame for the decline of the high street. We have too many shops and not enough shoppers. We have an economy stalled. Online shopping is hitting home.
But my real beef is that the report contains little of substance, while what there is looks rather misplaced. As seems fashionable, we are encouraged to think that red tape is an issue. But that doesn’t stop Mary from suggesting “super-BIDS (business improvement districts)”, legislation to allow landlords to sit on BIDS, “town teams”, “parking league tables”, research into out-of-town schemes, “contracts of care”, a “public register of landlords”, “empty shop management orders” ad nausea.
All that sounds like lots of committees and red tape to me.
But my real beef is the tilt at landlords, with sweeping statements suggesting they “would rather leave a unit empty for years than consider discounting its rent”, or “the use of comparatives in setting rent levels is often unhelpful”.
Apparently, the “upward only rent review is unhelpful where a struggling entrepreneur is interested in staying in a property for 15 years”
Landlords need to sign up to the Code of Leasing Premises, too.
Mary’s ideas are out of date. In my experience, landlords find any deal they can at this time. How does she want rents to be set? By a lottery, perhaps?
Entrepreneurs don’t, in my experience, sign 15-year leases, and the upward only rent review argument died long ago. In my view, the code is rarely followed because people don’t want lots of choices. They want a clear offer, and they negotiate – hard!
The lack of understanding about the planning system is breathtaking. She suggests we bin the Use Classes Order so that we can have “housing, offices, schools and sport” on our high streets. We can’t have betting shops though – they get a battering. But markets and car boot sales find favour, allowing anyone to set up stall where they like, although how this helps us fill empty shops is lost on me.
The review is a lost opportunity. I believe this was a “safe” political document. There is no brave new world here – some hints of it, but nothing of note. And God forbid that we end up with “malls” as the only way to shop.
Fiona Hamilton, TITLE, Jones Lang LaSalle
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David McCorquodale, head of retail in Europe for KPMG’s transactions and restructuring practice
Whilst welcoming the review, I feel it is virtually impossible to halt the natural evolution of the retail sector – the way people shop and where they want to shop.
Among all of Mary Portas’ 28 recommendations, it was those that suggested the removal of regulatory and red tape burdens – such as making it easier for people to become market traders by removing unnecessary regulations – that will probably have the greatest impact.
The underlying shift in consumer behaviour towards shopping online and in out-of-town malls and supermarkets will be hard to reverse without imposing financial penalties. And it would probably be unfair to discriminate in favour of the high street by taxing online shopping or out-of-town parking.
The rise of online shopping is a major cause of the high street’s decline but, rather than it being seen purely as a threat, I believe it can also provide an opportunity.
Shopping today is about multichannel, where the consumer shops in multiple locations, both real and virtual.
The report notes that we have sacrificed community for convenience. That may well be true, but given that consumers today are busy and juggle many competing demands, it is hardly surprising.
If high streets want to compete they need to offer value for time as well as value for money. This can be achieved by offering more of an experience to make a trip into town worthwhile, or by simplifying parking and access.
High street evolution is impossible to hold back, but government changes to regulations could make the process less painful.
Ivan Tennant, Plan Projects
Portas adopts an entrepreneurial, can-do attitude. She offers leadership. This is desperately needed if high streets are to acquire fresh strategic direction. High streets are not failing; in many ways they are the future, although the high street may shatter into a number of alternative ‘brands.’ We may come to know them as ‘urban villages,’ ‘areas of intensity’ or they may adopt local names such as ‘the lanes’ or ‘the creative quarter.’ These brands work by reinventing themselves with people in mind.
Portas demands that high streets should behave more like businesses; but her business is one that takes its social responsibilities as seriously as its core commercial purpose. The model she proposes is a ‘hybrid’ that recognises the ‘best deal’ for the consumer captures both a good bargain, and social value. This notion of hybridity needs to be at the heart of high street revival strategies.
Rebranding reflects a positioning strategy designed to exploit emerging opportunities and new consumer tastes. Not all the shifts in high streets’ economic landscape undermines them: climate change will force more people out of their cars and encouraging more sustainable forms of behaviour. Use of the city centre is more sustainable if these areas are within walking or cycling distance of people’s homes. Edward Glaeser has written convincingly that reducing carbon omissions relies on building at greater density in the urban core. For retail areas in these locations, this offers a new life line.
Equally persuasive is the digital revolution; while Portas sites the internet as a major factor in undermining the viability of the high street, her text is littered with ways digital technology can foster growth. The symbiotic relationship between the high street and creative industries is one. The urban woodwork in East London is riddled with highly digitised micro creative businesses; like ants protecting a tree, they are locked in a symbiotic embrace with the streets which provides them with food and resources. Robust planning policy will deliver the carefully husbandry needed to cultivate these mutually supporting relationships, and Portas is right to acknowledge its role.
All forests need big animals, and supermarkets are a key part of the eco system. The phenomenon of local supermarket brands is a vote of confidence in the high street. Bethnal Green Road, a street I know well, supports a large supermarket, a local Tesco, a thriving market and a host of independent shops. This is a mutually supporting network of businesses supported by a diverse, mixed income community. I marvel at the survival of the local butcher; I am convinced it is there for two reasons; firstly because the street market around it creates fun street scene that encourages people to pop into different stalls and shops in their search for quality and bargains and, secondly, because the supermarket works as a major pull factor.
Portas has much to say about the ‘cultural’ function of high streets. Indy Johar of strategy & design practice 00 sees high streets being ‘relieved of their conspicuous consumer responsibilities’ as a potential boon. To survive, they need to look at more imaginative and diverse ways they can serve their natural catchment areas. This may lead to becoming a digital hub, a centre of social enterprise, or providing street markets and slow food. But it is the very act of returning to ‘first principles’ in this way that high streets can pick up a thread that may lead them back to both relevance and vitality.
Mike Shearwood, CEO, Aurora Fashions
The Portas Review is very interesting but while it offers a number of sensible suggestions, it also makes proposals that are just not viable.
The high street situation is very complicated. As retail units become vacant, local authorities will look to re-zone them. Maybe they should create more office use, or residential to help provide affordable housing?
When people start to move back into city centres there will be food offerings and coffee shops, and these, in turn, will encourage the small boutiques. But all these changes will take time.
Clare Hartnell, head of property, Grant Thornton UK LLP
There isn’t anything in the Portas Review, beyond looking at punitive car parking charges, that will encourage consumers to go to the high street.
The creation of “town teams” and “BIDs” is all well and good, but who is going to pay for them?
Basically, the report suggests that high street landlords have to be more amenable to retail tenants to reduce the retailers’ costs. This is a pipe dream as the banks will apply huge pressure on landlords should they reduce rental levels, meaning that the proposal is not commercially viable.
In addition, it is hard to see why local councils that are under pressure to cut local parking costs would be willing to fund quangos.
The UK high street needs to be nurtured to restore its appeal and guarantee its future. A trip to any local high street means encountering the same brands over and over again. Those doing well feature unique shops and have a strong sense of their own identity.
Oddly, Mary Portas offers no discussion on the impact of online shopping, which seems to me to be to be incredibly short-sighted.
Going up against purely online retailers is a tricky path to navigate but perhaps it is this form of competition that is key to helping our ailing high streets.
People will happily order products such as DVDs and books online but there seems to be less appetite for buying groceries via the internet.
Aside from the popularity of online shopping, another trend to watch out for is the migration of retailers from the high street to large out-of-town shopping centres such as Stratford and Lakeside.
We expect this form of shopping experience to dominate over the next decade. High street retailers need to manage their working capital and, in particular, their stock levels.
Big brands may currently dominate UK high streets but let’s go back to basics and offer the personal touch. Perhaps a good way to start is to form a strategy to help the ailing high street instead of publishing reports by celebrities that do little more than state the obvious.
People like to deal with people, so we need to bring back the human touch.
Henry Trickey, head of property, McDonalds
We took an interest in the Portas Review as, obviously, we fully support anyone looking at the high street and anything the government can do to increase trading opportunities.
We have invested heavily in the high street – £65m since 2006, and £5m in restaurants over the past three months. We are doing all we can to drive high street traffic. However, there is a danger that this is all about the high street; out-of-town development is vital, too.
London and the South East have really been insulated in this economic crisis, but the impact of the recession can be seen in towns around the country.
It will be interesting to see how some of these towns survive, and I guess this is why we are looking at the review to give us ideas.
Graham McIntyre, partner and head of retail at Clarke Willmott LLP
From changes to business rates, creating town teams, new use classes, and a presumption in favour of town centre development, the Portas Review is full of ideas, even if most are not new.
The key to success will be the fast implementation of some of these ideas before more high streets reach a tipping point. The difficulty is that change will take time and money – and the authorities have neither.
For example, recommending local authorities to make more use of compulsory purchase powers to encourage redevelopment is a great idea. But do the councils have the money to buy empty shops without a developer lined up?
To compound the lot of the developer, the review suggests they should make a financial contribution to ensure the local community “has a strong voice in the planning system”. However, will this make development even more expensive and less likely to happen?
The report advocates the Commercial Lease Code, which discusses upward/downward rent reviews (again, a Portas recommendation). But most leases still contain upward only rent reviews. In a difficult market, landlords are as reluctant to agree to upward/downward reviews as tenants are keen to agree them. Landlords and tenants need to work more collaboratively.
This brings us to a core concept of the review – the creation of “town teams”. Currently, the government is looking for 12 run-down high streets to share £1m as part of a pilot scheme. While the concept of town teams is again not completely new (versions have existed in local chambers of commerce for decades), the fact that there is now so much at stake for high streets should act as a catalyst for their success.
The property landscape is changing. Hopefully, the review can capitalise on and help to drive those changes, but this needs to happen fast.
