Tom Entwistle comments on the state of the UK’s high street
Whatever initiative governments have tried so far, nothing seems to be working for Britain’s high streets.
Let’s cut to the main point here: the UK high street is under serious pressure. On the one hand, the latest RICS UK Commercial Property Monitor paints a gloomy picture, a flat, fragile scene in the UK’s commercial property world—particularly for retail, which is still in negative territory. On the other, we have major cities like Oxford, Manchester and London quietly bucking the trend, enjoying enviable vacancy rates and high levels of footfall.
So, what’s going on? Is this the end of the traditional high street in some towns, or is it just a painful reset? More importantly, how can government, landlords, investors, and local authorities shape what comes next?
The High Street at a fork in the road?
The National Condition – RICS says it all
RICS’s Q2 2025 Commercial Property Monitor doesn’t try to sugarcoat it. Retail occupier demand remains stubbornly negative. It’s currently flatlining or in decline by at least –13% on net balance, no change since Q1. There’s no meaningful growth a reflection of the UK economy as a whole; it’s barely hanging on according to RICS
Offices are doing better on average (+2%) and industrial is holding its own (+4%) showing slight positives, but anything between –5% and +5% is effectively stagnant says RICS 2
It all echoes wide-spread fatigue: firms are reluctant to expand fearful of a doubtful economic trajectory, tempered by anxiety about the coming October budget, costs are rising as inflation is in the region of 4% squeezing retailers’ margins, and landlords left with tough decisions given the recent ruling in the River Island rescue case where landlords are left carrying the can for the retailer’s demise.
All is not lost, there’s always another view: Capital Economics in its 24 July 2025 UK Commercial Property Chart Pack states that:
“Yields for the main commercial property sectors have been remarkably stable over past 18 months, and we expect that stability will continue. That means capital value growth will average under 3% p.a. over 2025-29. Thanks to stronger rental growth the residential sector will outperform, and retail will benefit from a higher income return.”
The message from RICS however, is that retail is the weakest link and without some drastic changes, its long-term erosion is set to continue.
The decline has been something of a perfect storm, a many faceted onslaught in what is likely a major structural change in the marketplace.
First and foremost, the growth of online shopping, accelerated during Covid, continues to dominate the retail challenge. The Office for National Statistics (ONS) puts current online sales around 25–26% of the total retail. This is up from around19% before COVID.
In River Island’s case, increased competition from ultra-fast and cheap end fashion retailers like Shein and Temu, known for their low prices and rapid turnover of trendy imported clothing, sold directly to the customer, has put them under increasing pressure, given their extensive retail estate.
This competition, combined with rising operational costs and the shift towards online shopping, has contributed to the likes of River Island and other similar retailers' demise or restructuring plans, including in River Island’s case, the closure of 33 stores and rent reduction on 71 more.
Secondly, shopping habits have shifted. Younger generations spend more time on experiences and less on physical goods, especially in city centres. Younger generations like the Millennials and Gen Z are increasingly prioritising spending on experiences rather than their material possessions. This shift has been referred to as the "experience economy," driven by a desire for lasting memories, social connection, and personal growth.
Dr Peter Brooks, Chief Behavioural Scientist at Barclays on the bank’s analysis of the boost to businesses that accompanied the Taylor Swift ‘Eras Tour’, dubbed ‘Swiftonomics’. says:
“In fact, when compared with existing figures shared by other organisations, the bank’s research shows that this anticipated spend on the Eras Tour is more than 12 times the average cost of a UK night out, more than twice the amount people pay to attend UK-based weddings – and even higher than the cost of a UK-based stag or hen do.”
The costs involved in running a retail shop or chain are through the roof: business rates, energy bills, wage hikes, and logistics are siphoning profits. The threat looming for their landlords is the investment needed in many older commercial premises to meet the strict environmental standards on the horizon.
There’s also been oversupply in lower-tier towns, too many shops chasing too few buyers, though this is adjusting as more retail chains close-down stores and consolidate in the more successful UK retails centres, mainly the major cities.
The result of all this has been some towns falling into decay as shop vacancies climb and footfall slides. The towns with highest vacancy rates are often those that have experienced economic decline and the factors listed above: competition from online retailers, or changes in consumer behaviour.
Some towns may also be suffering from a lack of investment which results from a downward spiral: more vacancies which mean diminished property values and a reluctance for retailers to enter new leases in a sea of decline. Unless local authorities, central government, landlords and retailers combine forces and adapt to the changes, market forces will determine the outcome.
While most stories are bleak, Oxford has a different story to tell. Oxford’s not unique, other UK towns and cities could tell the same story. A Centre for Cities report ranks Oxford’s high street among the best-performing across the UK. Vacancy rates are low, a good indication of overall retail health. It’s just 9% which is slightly higher than Cambridge at 8.5% and London 7.4%.
Local property consultant and manager Vail Williams, who manages roughly 75% of the high street, says rent levels have now bounced back to pre-COVID peak levels and new enquiry levels are healthy again. What does he put Oxford’s retail success down to?
There are four pillars he says: (1) it’s an affluent, high-income location, (2) there’s a dense retail footprint with 1.7 shops per 1,000 people versus just 0.8 in London, (3) it’s a massive visitor economy with tourists keeping footfall and retail spend alive, and finally (4) the local authority and the large institutional landlords have put in the investment, playing the long game, with pedestrianisation, shopper friendly upgrades, £8M spend on a covered market, and a City Centre Action Plan in place since 2022.
Oxford is the case study par excellence in future-proofing a high street, they’ve reimagined their retail around real estate resilience.
It’s well known that small independent retailers are struggling. These bricks and mortar shops or in fixed locations at the mercy of footfall and the health of the town. If the town declines and the destination stores leave, so does their business. What’s more they are unable to develop hybrid (in-store and online) business models as effectively as the large chains can.
If the Lange chains, the likes of River Island, struggle then pity the small guy and their landlords. This matters. If even big players need rent relief and downsizing to survive, it’s a tsunami warning for landlords with traditional small retail portfolios.
Centre for Cities reports’ broader findings show just how uneven the UK high street landscape has become. There are the worst-hit towns like Newport with a 19% vacancy rate, Bradford at 18%, and Blackpool at 17.6%. The Guardian
These towns are suffering from the exact opposite of Oxford: low spending power of residents, too many shops per person, virtually no tourists, and town centre spend going elsewhere, often to out of town retail parks, malls and bigger cities.
Without economic renewal in some of these locations local authorities' efforts to rejuvenate the high streets are basically futile and perhaps a waste of resources. Without more well-paid jobs, housing, office space where people are attracted to live, work, and play, it would appear there’s a hard truth behind this - you can’t paint over the cracks. You’ve got to root, and branch sort out the creaking architecture.
The government is limited in what it can do with policy. Its tools are limited, just take Boris’ Levelling Up policy. The government is great at thinking up new laws and making legislation, not so good at long term thinking and investment beyond a Parliament cycle.
The Levelling Up Fund and its Town Deals with regeneration grants do help but papering over empty shop fronts and compulsorily re-letting units won’t really cut it.
Business rates reform remains illusory but vital as many retailers cite this as their major stumbling block, the biggest expense after their rent. Many areas and small retailers qualify for relief, but reforms must go wider than mere exemptions.
Flexibility in local planning laws has improved with permitted development rights (PDR) and use class E giving some flexibility and simplifying conversions without the need for full planning approval. It is giving landlords the freedom to change space - boutique gyms, cafés, clinics etc.
But more investment is needed in infrastructure and built environment upgrades, amenities, utilities and the spaces needed to make people feel proud of their environments and welcome again. In short, the government must target local economies, not just the aesthetics of the high street. They problem it has in a low growth highly indebted national economy, the resources are extremely limited
The high street as we’ve always known it is evaporating. That doesn’t mean it will become extinct. The top-tier locations backed by local economic strength (Oxford, Manchester, York, Edinburgh, Cardiff and many more) are shifting to experiential locations, attracting footfall to a subtle blend of retail and leisure.
Those centres are lucky; they have everything going for them. It’s the suburban and weaker towns that risk slipping into the abyss. The vacancy rates will keep climbing unless new functions, new life is embedded – new employment, new housing, better healthcare and workspace to make them stay relevant.
The traditional retail shopping street in some locations will face steep drops in valuations unless mixed with other uses, leisure, housing, offices and workspaces. The key strategy for landlords: try to spot opportunities for change, small pockets of resilience early on.
The UK high street isn’t dead, but in many locations in the UK it's dying. It’s rooted in old retail models and weak local economies. Recovery will depend on bold thinking on the part of local authorities and well as on landlords. Tinkering round the edges is not the solution, it needs smart councils, and targeted policy interventions, and innovative landlords. For central government it means economic regeneration, easier said than done.
[Main image credit: Fablo Gasperoni]
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