High streets to become 'social places' predicts retail expert Mary Portas

Portas expressed surprise at the 13.6% rise in online sales to offset a 6.1% decline in store sales – meaning that the fashion retailer expected annual profits to rise by £8m to £725m – and forecast a difficult future for the high street.

Speaking to the Today​ programme, Portas said: “When we look at maybe 30% of our sales within the next five years [taking place] online, what are the roles of those spaces that are being left? We have many towns up and down the country that look fairly dismal.”

She added: “What our high streets will become are social places. They are vital to communities so we need the Government to look at the role of high streets in the future and look at the ageing way that we put tax and rates bills on, and the rules of landlords and parking.”

With the prediction that high streets will operate as social rather than strictly commercial hubs in the not too distant future, what part can pubs play in urban regeneration and how can they be expected to do so when burdened with soaring costs that are putting a large number of them out of business?

Association of Licensed Multiple Retailers chief executive Kate Nicholls explained: “We are constantly in dialogue with the Government and with local authorities about what they can do to support hard-working and valuable businesses in their areas and contribute to an environment in which venues flourish.

"Part of this approach relies on authorities, both national and local, fundamentally changing their perception of businesses; stepping away from the idea that they are burdens or cash cows to one in which they are recognised as important assets.

“As we have been saying for years, when hospitality businesses flourish, the knock-on effect for other businesses and other parts of town and city centres is positive. Healthy pubs, bars, cafés and restaurants mean a dynamic and thriving community. These businesses attract customers to socialise and spend money in open and welcoming environments and other businesses succeed as a result."

Business rates reform

Nicholls added: “We worked with Mary on the original High Street Forum and agree with her on the need to ensure that they are social and community spaces and the positive contribution pubs, restaurants and coffee shops make – on average it is £250,000 gross value added to their local community and economy.

“If authorities are serious about supporting jobs and investment, and ensuring that towns and city centres across the UK remain viable and healthy, then a strategy that promotes them as social spaces, with hospitality businesses at the centre, is vital.

“That means tackling costs that continue to spiral for many businesses and action to provide clarity and certainty to allow these businesses to plan and grow, and to continue attracting customers to the high street. Of primary concern is a focus on reforming an out-of-date business rates policy that is strangling high streets. Without this much-needed reform, it will be difficult to safeguard or support the community spaces Mary is talking about.”

Fairer deal for pubs 

A spokesman from the British Beer & Pub Association said: “Mary Portas is right to focus on this issue. With consumers moving towards more spend on leisure activities rather than goods in our high streets, pubs and the wider hospitality industry will be even more vital to our town centres. This does mean we need to look hard at tax issues.

“When it comes to business rates, we need online goods retailers to be paying a much fairer share of the total rates bill, as pubs are being hit hard. A comprehensive review of business rates is now required.”

Mike Clist, CEO of the British Institute of Innkeeping, commented: “The BII agrees with Mary Portas that the high street is an essential component of a thriving town and community. As part of this, pubs support over 900,000 jobs throughout the UK and contribute £23 billion to the UK economy. They are a force for good and have a unique role to play, with many making investments and improvements to their infrastructures.

However, Government needs to understand that unless they look at the way these businesses are taxed, this investment will dry up. In particular we continue our call for a full reform of business rates to make it fairer in comparison to the newer online retail businesses.”