Portas Pilots – One Year On

There’s been a lot in the news this week about the Portas Pilots – so here is a round up and my view on some of the key issues that have been discussed.

Why have the Portas towns got high retail vacancy rates?

There are some forces of change that work on a national or even international level, affecting all town centres, such as the recession – people have less money to spend and e-commerce – more of people’s spend takes place on-line.

Then there are factors that impact on individual town centres, such as the size of the catchment – whether more or less people are living in the area, how many people work in the town centre, the retail and service offer, for example comparison or non-food retailing has suffered the most in the recession, food and service business have done better.

Other factors include its location (northern towns have higher vacancy rates than those in the south), size (small centres are more resilient than large) and their accessibility or the ease with which people can travel to other competing centres.

In the case of the Portas towns, what is more important is the long term vacancy rate. For example, pre-recession Stockport’s vacancy rate was 12.7% compared to a national average of 10.3% A long-term vacancy rate higher than the national average indicates a long-term problem, and in most cases, an over supply of retail floorspace.

Whilst the Town Teams can get behind the existing retail, this is difficult if it is spread all over town. A strategic approach to concentrating retail into the right-sized centre is also necessary.

Have the Portas Pilots got high churn rates?

In a word – no. You could not pick out a Portas Pilot accurately on the basis of the number of shops opening and closing in its centre. Croydon has the highest churn rate – but then it probably had the highest concentration of multiple retailers, and due to the amount that closed last year (HMV, Comet, Clinton Cards, JJB Sports, Blockbuster, and Thomas Cook etc.) it’s not surprising they have more of their share of 4,000 empty shops to fill.

As Croydon is in the more affluent south, then retailers are likely to be more attracted to relocate there, rather than Nelson in the poorer North.

Churn rates are higher everywhere.
There has been a dramatic fall in the length of leases on commercial properties over the past five years. Before the recession, the average length of a high street lease was 10 years. There’s no doubt the economic climate has meant property owners have had to offer more flexible lease arrangements –a third of high street leases are now less than 5 years.

So, retailers can relocate to more profitable locations – areas with higher footfall – or larger, more efficient retail space, more easily. In other words they are not so ‘trapped’ in locations, which previously kept the churn rate down.

Also, with shorter term and pop-up leases, rent and rate relief, more independent retailers are being attracted into premises that would not have been feasible for them before. However, like other small business, their failure rate is high. A small shop has about a 40% chance of being in business 5 years after opening.

In a survey we did of 600 small retailers in the UK less than a quarter had a business plan, many of them had no previous retail experience and did not invest in training. We found a significant relationship with having a business plan the number of years the shop was in business and turnover.

Without a business plan and some grounding in retaiing, new entrants may be making the wrong location decisions – based upon supply side factor considerations like the price of the unit, rather than whether there is real market demand for their offer and whether the shop is in a location that attracts enough footfall.

How can the Town Teams increase footfall?

In the short term – by making the most of the space and the assets they have. Markets, vintage fairs, festivals, promoting existing retailers through guides, websites etc. Free or cheap parking on its own will not encourage people to the centre if what they want isn’t there, if there is nothing to attract them, if they can’t find it – or the town is dirty or feels unsafe.

But longer term, towns need to have an offer that meets the needs of their users. Retail and consumer data should be used to undertake an analysis of the retail area and work out what is missing and what sort of businesses would do well. Small in-town or edge-of-town supermarkets are associated with lower vacancy rates. Towns should actively encourage certain types of retailer – by going to other locations and seeing what is missing and who they could attract. If a town doesn’t want a supermarket then it should consider options like a local food market.

Towns will need to accept that retail floorspace has to shrink by between 20-40% and should help surviving retail outlets concentrate in the same part of town. This is the strategic stuff that needs some vision and leadership. Towns should be thinking about what the other space can be used for, in terms of uses that will bring more people into the town centre; offices, education, sheltered housing… in the next 10 years over 12.4 million people will be over 64 so more people will need live near to locally accessibly shops and services as they may not be mobile enough to travel to shop or visit their GP.

How can the towns improve their image?

There’s been a lot of investment by towns and cities into rebranding. But behind every good brand you have to have a good product, so there’s no shortcut to the investment and effort needed in terms of getting the place product right.

However, place perceptions can offer lag behind reality – and if a town has a poor image it can take a long time to change that. Place ‘ambassadors’ should be engaged; these could be the local press or key stakeholders like local retailers, for example. Basically, people that can and are willing to ‘talk-up’ the town.

A rebranding exercise can be useful, if it is thought of as the ‘organising principle’ for integrating measures (e.g. events, media relations, residents’ participation). But it needs to capture the place’s distinctiveness and shouldn’t just be a trite slogan – like “open for business”. What town wouldn’t be open for business?

What’s all this about the night-time economy?

Reports by the Local Government Association show that the public and council offers are concerned about the proliferation of sex shops, betting shops and food take away outlets. But if a property is empty landlords will want to fill it. The problem is the landlord is very unlikely to live in the town that seemingly becomes plagued with late-night bars and take-aways etc.

Councils can stop operators by using licensing restrictions, but they may well be challenged – and this is expensive at a time when they have no cash. Splitting the economy into day and night isn’t very helpful. The economy should be seen as a whole – if a late-night takeaway causes a litter problem that puts people off using the town in the day then the net effect on the economy may be negative.

What sort of retailers are doing well?

Well it is not all doom and gloom on the high street. Primark has seen its sales shoot up 24% in the last 6 months (to March 2013). Unlike other retailers, it is not going on-line as it is concentrating on growth in its existing market and profitability from improving retail operational efficiency. So, for example, it is expanding the sales floor area in shops so it can sell even more.

Even though there is a decline in comparison retail (electricals, toys etc.) Argos has seen its sales grow by 3% because of its successful click and collect service. Whilst consumers like the convenience of shopping on-line, the delivery aspect can be very inconvenient – so the ability to order something and know you can pick it up is very compelling. Likewise, John Lewis and Waitrose have seen big growth in click and collect sales.

And lastly, footfall in towns that participated in last years ‘Love your Local Market’ increased by 4% (against a backdrop of 6% decline). There is a growth of the Totally Locally movement, and after the horsemeat and other scandals, more people want to know where their food comes from, and smaller food retail businesses can offer this more personal connection with the supply chain and this reassurance.

So, one year on – the same questions are being asked and answered – this is worrying as we need to move on to real action if we want to support our towns and high streets to change so they have a sustainable role in the future.

Cathy, Professor of Shops


Today saw the Queen of Shop’s review of Britain’s high streets.  Mary Portas’ brief from David Cameron was “to create vibrant and diverse town centres and bring back the bustle to our high streets”.  This call for Britain’s towns to be ‘vital and viable’ is nothing new, in fact this commitment has been incorporated into various strands of national policy for at least 15 years.   

So why is the future for towns looking so bleak?  And what can the Queen of Shops do, that three successive governments have said they’d do and haven’t?       

Mary says that her report is not about pointing the finger of blame but in order to solve problems, you have to fully understand them.  The factors that drive town centre decline are complicated, interlinked, interdisciplinary and paradoxical.  As Mary points out  “(w)hen I started my work on the review, I ploughed through a huge pile of previous reports about high streets and town centres and found so many good ideas which have simply sat on the shelf. Pretty soon I realised why. What I discovered is the complexity and diversity of the problems faced by high streets.   And I’ve learnt just how much of a complex web of interests and stakeholders are involved, many of whom have simply failed to collaborate or compromise”.  

Town centre decline is ‘a messy problem’, it doesn’t fit neatly into one government department, one of the reasons why the Prime Minister chose to ask a celebrity consultant to conduct a review rather than his own civil servants.  Mary says she doesn’t want to point the finger of blame in her report, but to solve a problem you need to fully understand it – and whilst she makes a lot of sensible recommendations, she doesn’t ask why the majority of her recommendations have already made and in some instances, put into practice, but have still not worked.

“It’s obvious, it’s all wrong and anyway they said it years ago”.   Most of the on-line comments about her recommendations fit this paraphrase coined by the respected economic geographer Paul Krugman, commenting on how his work on new economic geography and city development was received from peer reviewers.  Nevertheless, these comments raise interesting questions. If a solution is obvious and ‘old hat’, then what has stopped it being put into practice?  Likewise, if something is ‘all wrong’ then why is that? And is the proposal at one end of a ‘solution continuum’, with its opposite ‘all right’?

Although there are 28 recommendations, they fall into six main categories:  getting town centres running like businesses, getting the basics right to allow business to flourish, levelling the playing field, defining landlords roles and responsibilities, giving communities a greater say and re-imagining our high streets.

They are a mixture of top-down and bottom-up solutions that can be summed up in one recommendation.  Change needs to be locally-driven within a supportive policy framework.

But three successive governments have known this already – and backed a commitment to ‘vital and viable’ town centres.  We know many towns are failing, especially those that are near cities and coastal towns, where retail vacancy rates run at nearly 30%.  Even the ones that are ‘viable’ or, in other words, are economically successful, are not vital in the same way they were. Research by the New Economics Foundation has showed that 41% of towns and cities are ‘clone towns’ i.e. more than half their shops are chains.  Its hardly surprising people are not using their town centre if it is only offering them an inconvenient ‘copy’ of what’s available in other more accessible areas such as out-of-town superstores or larger cities, that have good public transport links.

One of Mary’s main recommendations is to create town teams to take a more direct role in the day-to-day running of a town and also create a vision and long-term plan for the place’s future.  There are already, I would estimate, 1,000 or so places that have such a partnership.  It might not be formal town centre management or a Business Improvement District, but the principle’s the same.  A partnership of local stakeholders, made up of businesses, the council and local residents.  Town centre management has been in place in the UK for nearly 25 years but it hasn’t been properly supported.  We know it’s a good idea but how do we actually encourage and facilitate it?

Mary also talks about communities having more say, again an issue highlighted in recent government reforms such as the Localism Bill.  Traditionally it has been elected council members and their officers responsible for places.  The very fact that so many places have lost their way, illustrates Mary’s comment that these areas have been mismanaged and ignored for too long.  But in my experience it is hard to challenge the status quo, unless the existing governance structures are open to such change.  People responsible for places need to have the right skills and knowledge – it is a really important job so they need to be competent.  If they need some training and support, this needs to be available and if they are not up to the job, they shouldn’t do it.  Again whilst Mary calls for professional and inclusive place management, she doesn’t say how this will happen.  

Her other main and very important recommendation is to level the playing field.  In particular recommendation 14 states “Make explicit a presumption in favour of town centre development in the wording of the National Planning Policy Framework”.  This will be interesting as this gets to the heart of the issue; will a government introducing planning reforms to simplify decision making by getting rid of such guidance and statements be prepared to introduce this intervention?  Local action is crucial, as high streets won’t fix themselves, but this effort has to be within a supportive planning policy framework.  So if the Government really wants to put ‘town centres first’ then by default, it means other types of development coming last.

Town centres are more than just shopping destinations.  They have been the heart of the community, in economic, social and political terms.  Of course, if a centre doesn’t have a town to serve anymore, then its declined should be managed.  But for those towns and cities that still have a catchment, then global trends, such as increasing transport costs, an ageing population and, ultimately, global warming, means that politicians should be doing what they can today to ‘future-proof’ our towns and cities.  They offer a concentration of services with transport links and a ready made ‘brand’ (their name).  In the long run, it is so much cheaper to not reinvent the wheel!