Tag Archives: decline

Are ‘dark stores’ bringing some much needed light to the high street?

Posted on by

As we pass the first anniversary of the initial lockdown and look towards opening things up again, will we see a change in footfall trends in favour of the high street as people yearn to get out again, or will it continue to experience a downward trend?

Judging by pre-pandemic trends, it would seem that high street businesses will need to do more than just open back up to entice people back to the high street. Indeed, there were signs of diversification on the high street before the pandemic in response to declining footfall. And the pandemic has led to many more innovating to survive the current challenges, such as creating pop-up ecommerce centres. Perhaps such moves could help save the high street, albeit not as we know it.

A downward trajectory

The recent news of permanent closures of big-named high street stores such as Debenhams, Laura Ashley, Top Shop and Dorothy Perkins after the collapse of Arcadia Group, and the closures of more John Lewis outlets, suggest a bleak outlook for the high street. And the pandemic has spurred the worst decline on record.

Recent figures from PwC reveal that an average of 48 stores, restaurants and other leisure and hospitality venues closed every day in 2020 – a total of more than 17,500 outlets.

This may be the worst decline on record but it is also a continuation of the downward trajectory that the traditional high street was already on. And it has been argued that this is actually a reflection of things that happened pre-pandemic, with its full impact ‘yet to be felt’.

In its quarterly footfall monitor, the British Retail Consortium highlighted in May 2019 that high street footfall had fallen by 1% year-on-year and that vacancy rates on local high-streets had risen to 10.2%, equivalent to one in ten shops having succumbed to the high street crisis. This was the highest vacancy rate in four years and it continued to increase in the next quarter.

Support through a crisis

It has become clear that trends before the pandemic have just been accelerated by it. The continued growth in online shopping and the impact of government policy costs such as business rates are just a couple of the causes of the decline in high streets over the years that see little sign of abating. But the urgency of the current situation has seen a huge increase in government support across the board which has helped many businesses stay afloat as they try and wait out the storm.

In December 2020, the UK government announced it would invest up to £830 million from the Future High Streets Fund in local high streets across England to help them recover from the pandemic and drive long-term growth.

In September 2020, funding was secured for England’s historic high streets through the £95 million government-funded High Streets Heritage Action Zone (HSHAZ) programme, which is delivered by Historic England. The aim of this is to help transform and restore disused and dilapidated buildings into new homes, shops, work places and community spaces, restoring local historic character and improving public realm.

And just this month, the government has announced a series of new measures to support a safe and successful reopening of high streets and seaside resorts, including a £56 million Welcome Back Fund to help councils boost tourism, improve green spaces and provide more outdoor seating areas, markets and food stall pop-ups. This builds on the £50 million Reopening High Streets Safely Fund announced in May 2020. Similar support schemes have been introduced by the devolved administrations in Scotland, Wales and Northern Ireland.

Of course, this hasn’t been enough to save the high street stores that have announced closures. But it brings to the fore once more that high streets are about more than just shops as each funding programme highlights the aim of transforming high streets into vibrant mixed-use places where consumers can enjoy social experiences.

Adapting to survive – dark stores bringing light to the high street

As the PwC study suggests, it is really about keeping up with consumer behaviours that is the challenge for retail, perhaps even more so in times of crisis. And there have been many examples of high street retailers adapting to survive.

With the huge increase in online shopping during the pandemic, many manufacturing and distribution centres were operating at maximum capacity which led to some retailers unlocking the potential of their local high street stores to provide local distribution hubs, known as ‘dark stores’.

Lush is one company that changed the way they used their retail space so they could continue to use it while their stores were closed. It created Lush Local, a pop-up e-commerce centre which used the shop as a local distribution centre so they could fulfil local orders and not let their current stock go to waste.

Some businesses have also partnered with others to make use of local unused space such as Crosstown Doughnuts which have been trialling the use of dark stores in Cambridge and Walthamstow, partnering with independent operators so it can provide on-demand deliveries and collections to customers.

As ‘bricks and mortar’ retailers try to adapt to support their online capability, providing efficient local deliveries, at the same time as utilising their physical retail space, the ‘dark store’ trend may be here to stay. Pre-pandemic, it was reported that using dark stores and offering click and collect can reduce delivery costs and increase profit margins. Analysis showed that if deliveries from dark stores increase by 50%, profit margins could grow by 7% as a result of lower delivery costs and higher delivery throughput compared to conventional stores (while also not affecting store operations).

And it has been suggested that this model can be further adapted to provide ‘hybrid stores’ as shops re-open. These hybrid stores enable local stores to combine space for their fulfilment centre with their physical shop so consumers can still benefit from the tangible experience offered in store that can’t be replicated online.

Final thoughts

Only time will tell if recent innovations will have the desired effect. What is clear is that the rate of change cannot continue at the pace it was before the pandemic if high streets are to have a fighting chance. Dark and hybrid stores could be part of the answer. But much more is needed.

The most successful high streets, it is argued, will offer a mix of retail, entertainment, culture and wellbeing as they focus on the experiential side of things, because, in the words of retail guru Mary Portas, “vibrant, innovative, socially dynamic high streets will help this country not just heal, but thrive.”

If you enjoyed reading this, you may also interested in:

Follow us on Twitter to find out which topics are interesting our research team

‘Bending the Curve’ of biodiversity loss – could Covid-19 be the catalyst for change?

Posted on by

dead forest pic

“The evidence is unequivocal – nature is being changed and destroyed by us at a rate unprecedented in history” (WWF)

The latest Living Planet report from the Worldwide Fund for Nature (WWF) finds that 68% of the world’s wildlife populations have been lost since 1970 – more than two thirds in less than 50 years – with the most striking result a 94% decline in tropical subregions of the Americas. The report says this ‘catastrophic’ decline shows no signs of slowing. The cause – human activity.

Until 1970, the ecological footprint of the human population was less than the rate of the Earth’s regeneration. Explosive growth in global trade, consumption, population growth and urbanisation means we are now using more of the world’s resources than can be replenished:

“To feed and fuel our 21st century lifestyles, we are overusing the Earth’s biocapacity by at least 56%.” (WWF)

The environmental impact of human activity is hardly a new topic but the numerous warnings over the years haven’t had the desired effect of changing society’s trajectory. The stark warnings from recent reports including the 2018 IPCC (Intergovernmental Panel on Climate Change) special report on the impacts of global warming, and popular programmes such as the Blue Planet II series which highlighted the devastating impact of pollution on the world’s oceans, have certainly helped heighten awareness and action has been taken across the world to address the climate emergency. Unfortunately, the progress made so far is not enough to reverse the current declining trends.

But the new report raises hope in that times of crisis new ideas and opportunities for transformation can arise and that the current Coronavirus (COVID-19) pandemic could perhaps be the catalyst for such change.

‘People and nature are intertwined’

COVID-19 has undoubtedly injected a new sense of urgency, emphasising again the interconnectedness of humans and nature. It has provided a stark reminder how unparalleled biodiversity loss threatens the health of both people and the planet.

Factors believed to lead to the emergence of pandemics – including global travel, urbanisation, changes in land use and greater exploitation of the natural environment – are also some of the drivers behind the decline in wildlife.

The report emphasises that biodiversity loss is not just an environmental issue, but also a development, economic, global security, ethical and moral one. And it is also about self-preservation as “biodiversity plays a critical role in providing food, fibre, water, energy, medicines and other genetic materials; and is key to the regulation of our climate, water quality, pollution, pollination services, flood control and storm surges.”

As well the pandemic, a series of recent catastrophic events are used to underline the intrinsic links between human health and environmental health, including: Africa’s plague of locusts in 2019 which threatened food supplies, caused by the unusually high number of cyclones; extreme droughts in India and Pakistan in 2019, leading to an unknown death toll; and Australia’s most intense bushfire season ever recorded, made worse by unusually low rainfall and record high temperatures, as well as excessive logging.

Alongside this, the “extraordinary gains in human health and wellbeing” over the past century, including reduced child mortality and increased life expectancy, are highlighted as a cause for celebration but the study warns that the exploitation and alteration of the natural environment that has occurred in tandem threatens to undo these successes.

Biggest threats to biodiversity

Clearly, biodiversity is fundamental to human life and it is vital that the drivers of its destruction are addressed; and quickly.

Drawing on the Living Planet Index (LPI), which tracks the abundance of mammals, birds, fish, reptiles, and amphibians across the globe, using data from over 4,000 different species, the report identifies the major threat categories to biodiversity:

  • Changes in land and sea use
  • Invasive species and disease
  • Species overexploitation
  • Pollution
  • Climate change

It may be surprising to learn that climate change has not yet been the main driver of biodiversity loss. In fact, globally, climate change features lower on the scale of threats than the other drivers in almost all regions. Changes in land and sea use is the biggest proportional threat, averaged across all regions, at 50%. This is followed by species exploitation at 24% with invasive species taking third place at 13%. Climate change accounts for 6% on average.

However, the report warns projections suggest the tables are set to turn with climate change overtaking all other drivers in the coming years.

But all is not lost yet. The report argues that it is possible to reverse these trends and calls for action to do so by 2030.

‘Bending the Curve’

This year’s report highlights findings from significant new research, the Bending the Curve initiative, which uses pioneering modelling of different human behaviour scenarios aimed at restoring biodiversity. It argues that this has provided ‘proof of concept’ for the first time that we can halt, and reverse, the loss of nature while feeding a growing population:

“Bending the curve of biodiversity loss is technologically and economically possible, but it will require truly transformational change in the way we produce and consume food and in how we sustainably manage and conserve nature.”

2020 has certainly made the whole world stop and think. And it has provided an opportunity to reset humanity’s relationship with nature. Encouragingly, there has been widespread talk of a ‘green recovery’ from the pandemic and the British public have recently backed a “fairer, greener Britain” amid concerns the government might be rushing the country back to a ‘business-as-usual’ model.

Achieving a balance with nature will clearly require systemic change, as the Living Planet report shows. In the words of Sir David Attenborough, “above all it will require a change in perspective”.

Read some of our other blogs related to the environment:

Follow us on Twitter to find out what topic areas are interesting our research team.