Alongside true love and compound interest, habit is one of the most powerful forces. The familiar click of the Christmas lights brought people back to London’s streets last week, with 2.5 per cent more people treading down the high street.
But with the pandemic came new habits and the fairy lights will be switched off eventually. So the UK high street has two choices as online shopping eats up more of its pie: fight a battle against an almost unbreakable trend, or seek to enhance a multi-billion pound international retail opportunity.
Since the start of the pandemic we have seen UK online apparel sales increase 19 per cent (£2.7bn) on 2019. It is good news on the surface, but with an overall drop in UK apparel sales of 24 per cent (£9.6bn) the shine on this prize starts to wear off.
This shift to online will see digital clothing sales overtake in-store sales in 2022 – three years ahead of pre-pandemic predictions, leaving high street apparel stores with a £14.5bn hole in sales by 2025.
It is a huge transformation in habit and the solution cannot just be setting up online or improving websites and delivery speed. Rather than borrow support from the government or steal sales from online competitors the high street will need to look for areas to build.
The international market offers a huge opportunity. In 2013, tourists coming to the UK spent a total of £4.5bn on our high streets, £2.3bn of which was on clothes. Predictably a pause on tourism has seen this income plummet during the pandemic.
The challenge has to be to grow it once more and rather than pushing against a trend to buying online, it can be reformed to build back the international pull of Britain’s shops.
When tax free shopping for visitors was scrapped in January 2021, under the VAT the potential for billions of pounds revenue from overseas shoppers was put under threat.
With such a large figure at stake, taking away the tax could drive the Laffer curve of retail, with the chance to bring greater revenue to the government and the wider economy than taxation would.
But alongside this, the UK needs to look and feel like a part of the modern world. With all-hours online retail and international cities vying for the competition, Sunday trading rules look like a hangover from another era.
Created when society and the way we shop was vastly different, the push for deregulation of the Sunday Trading Act has been a long one. But now that online sales are ready to overtake in-store sales we need mechanisms that will bring people back onto the high street: creating a modern high street starts with looking the part.
Reforms to the rules could add some £1.4bn boost to the UK’s economy and increase employment opportunities in the industry. Add to this that 68 per cent of consumers who buy because of the ability to touch, feel and try on products and the benefits giving consumers more time on Sundays could really help retailers regrow.
In London, there is talk of plans for specific international shopping areas to create tax-free pockets near the capital’s high streets.
But it shouldn’t stop there: Birmingham, Glasgow, Manchester, or Liverpool all have significant retail centres that would reap the rewards of the reforms.
The UK is a major international retail market, we’re selling ourselves short if we don’t focus our efforts on tempting tourists back to our high streets.