The woes of central London’s economy are well-known: a massive pandemic hit to retail and a sluggish recovery, particularly during the working week. In May, according to figures reported in the Financial Times last month, in-person retail spend in the City of London was still down by 31% compared with the same month in 2019. And footfall in Oxford Street in April was 52% lower than pre-Covid levels, according to the Retail Gazette.
With London now becoming the “home of hybrid working”, according to new research by King’s College London, does this mean that the suburbs are benefiting from central London’s woes? Not according to the FT: “The surprise, however, is that there is not an obvious offsetting rise in the suburbs. The spending missing from the middle has not simply been spread out into where workers live.”
There has been some increase in in-person spending outer London’s Zones 5 and 6, but only by around 3% more than in 2019. The picture is the same in the commuter fastnesses of the south east, where in-person spending is up by just 3.8%. This is less than the rest of the country, with the switch to online shopping the likely culprit.
The figures underline a continuing new challenge, not just to the capital’s beleaguered centre but to its suburbs as well. They are not necessarily seeing the regularly forecast “death of the high street”, but a new report from planning consultants Lichfields says there are nevertheless dramatic changes underway.
The report says that over the coming decade around half the city’s 14 “metropolitan” centres – the likes of Stratford, Croydon. Shepherd’s Bush and Kingston, as defined in the London Plan – and the same proportion of the 36 “major” centres, will lose retail space overall, the report says, along with two fifths of the 150 or so smaller “district” centres. It anticipates the main casualties will be what it calls “comparison” shops selling higher value goods such as household items, electrical goods, clothes and shoes, with “convenience” retail flatlining.
“London’s town centres are undergoing unprecedented upheaval,” the report says. “Long- term systemic shifts towards shopping online have been inflicted almost overnight, compounded by massive shifts in footfall and spending habits during the past lockdowns.”
It’s not all bad news – the report actually projects a small increase in retail floorspace across London as a whole, outside the central area. But the capital’s town centres could look very different, with retail increasingly replaced by food and drink outlets, culture, entertainment and leisure offerings, and more town centre housing too, as well as education and healthcare facilities.
“A more diverse offer to shoppers will continue to be increasingly vital for many types of centres over the next fifteen years, as will the importance for town centres to broaden their experiential offer, range of retail and unique selling points,” the report says. “Successful strategies will see a wider variety of retail, leisure, commercial and community uses intertwined with new homes above and around them.” It concludes that planners need to “recognise the scale of what may lie ahead” and “to seize opportunities and adapt their centres in response to changing needs and different challenges”.
The city centre is already looking towards a different future, with City Corporation policy chief Chris Hayward calling this week for the Square Mile to “once and for all leave behind its reputation for being just for work” and “reinvent” itself as a culture and leisure destination. London beyond Zones 1 and 2 may have to take the same journey.
Photograph from cover of Lichfields report.
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