Yahoo Finance Decaying Oxford St risks becoming blueprint for Britain's high streets, retail chiefs warn
Oxford Street’s decline risks becoming the blueprint for Britain’s high streets if ministers fail to support regeneration efforts, retail chiefs have warned.
A report authored by the Retail Sector Council, whose members include the chief executives of Sainsbury’s, Boots and Primark, urged ministers to support the industry by reforming competition law and levelling the playing field between online retailers and bricks-and-mortar stores.
Richard Pennycook, the former Co-op chief executive and co-chairman of the council, said more towns and cities were at risk of becoming “wastelands” because of a lack of incentives for retailers to invest in stores.
It comes amid a mounting row between Marks & Spencer and Michael Gove, the Housing Secretary, over the future of its flagship Oxford Street store.
Mr Gove rejected proposals last month by M&S to bulldoze and rebuild its flagship Marble Arch store to make way for a multi-million pound regeneration of the site.
Mr Pennycook, who is also the former chairman of department store Fenwick, said the Government needed to be “very mindful” of encouraging regeneration on Britain’s high streets.
He added: “If we don’t incentivise regeneration, then these places are getting hollowed out. Perhaps a sort of secondary benefit of the current discussion around Oxford Street is that it brings it closer to home.
“What are we collectively going to do about that? The last five years in Chester, Northampton, pretty much any large town in the UK, this has been going on.”
The Retail Sector Council was set up in 2018 to bring the Government and industry together to address challenges for the sector. It is co-chaired by Kevin Hollinrake MP, the minister for small business.
Its report said the rise of online shopping meant retailers were deciding to close stores, which then meant shopping centres became less attractive places to visit. This in turn encouraged more consumers to go online or to larger shopping centres further afield, it said.
The report added: “This is the vicious spiral faced by many towns and high streets – the more stores that close, the more stores that are likely to close.”
The council also urged ministers to step in and help retailers “when misplaced competition and other laws prevent the industry from helping itself”.
It used the example of the Government’s ban on plastic carrier bags, which it said had damaged the environment and cost retailers hundreds of millions of pounds, ultimately leading to higher prices for consumers.
The report added: “Competition law prevented the industry from co-operating to reduce usage of plastic carrier bags, so it required uncontroversial Government action to solve the issue. There are other ways the industry can work together with the Government on similar issues.”
Retail chiefs said the demise of high streets would ultimately hit the tax take for the Treasury, as fewer people would be employed, so National Insurance and income tax would both fall.
Dave McCarthy, a retail analyst and senior advisor to HSBC Investment Bank, who also sits on the council, said there needed to be “joined up thinking” by the government departments to understand the bigger picture.
He said: “Without the Government stepping in, then the tax take will fall, employment will fall and society will suffer.”
M&S chief executive Stuart Machin has said Mr Gove’s decision to block its Marble Arch refurbishment would have a “chilling effect” on investment across the country.
However, Mr Gove blocked the decision on the basis that it would “fail to support the transition to a low carbon future”, by demolishing the building rather than repurposing it.
M&S has since warned it may have to exit the flagship store, although it could choose to launch a statutory challenge to the decision.
The retailer argued the plans were vital to help revive the shopping area, which has been struggling with higher crime rates, empty sites and a surge in US-style candy stores.
In a letter to the Telegraph last week, Sacha Berendji, operations director at M&S, said an incident on Oxford Street which saw police arrest nine people and issue 34 dispersal orders was “another reminder of how bad things are” for the future of the district.
The incident is thought to be linked to a social media campaign which called on followers to “rob JD Sports” and other stores on the street.
Mr Pennycook said planning issues were just one of a number of roadblocks to helping with the regeneration of local areas.
“It’s also a question of what is the overall structure for investment and of local leadership, and incentivisation of people to regenerate those towns and communities. Because, if those things aren’t there, then there are big properties which are just left to sit there rotting.”
