Can cafe culture and more social opportunities save the high street?

Published

3 years ago

October 19, 2021

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As we begin to hit the shops ahead of Christmas, retail sales are back to pre-pandemic levels for the first time since restrictions eased in April.

We are now spending more on items like clothing and furnishings than we were in February 2020, according to real-time credit and debit card data from the Office for National Statistics (ONS).

But Sky News analysis of new data from the Local Data Company suggests there are fewer shops for us to visit – and that the slump of the high street long pre-dated the pandemic.

The decline of the British pub has been well-documented, but since 2016, retail shops have experienced similar closures. The number of retail units in Great Britain has fallen almost 7% over the past decade.

But many of them are being replaced by hospitality outlets. Since 2013, the number of independent cafes and tearooms has risen 10% and the number of chain coffee shops has increased by 7%.

Is cafe culture spreading across the UK?

The fastest growth has been in the East of England and the West Midlands, which now have almost a fifth more cafes and coffee shops as they had in 2013.

The North West has also experienced relatively rapid growth and now has the second highest density of hospitality venues after London at 28 per 100,000 people.

Of course, the capital has long been the cafe-centre of the UK. But while it still has by far the most cafes, coffee shops and tearooms per 100,000 people at almost 43, there’s only been modest growth since 2013.

Professor Michael Kenny, director of the Bennett Institute of Public Policy, says that many places are rebuilding their high streets around social spaces.

“There’s evidence to suggest that the more social opportunities there are, the more likely it is that people will spend more time and – some research suggests – more money in the town centre,” he says.

The government’s High Streets Task Force found that more retail-dependent high streets experienced a larger decline in footfall in the year to June 2020 than those also offering shoppers a range of social and leisure services.

This chimes with a survey by business consultancy CACI, which found that consumers who visit cafes and restaurants spend around 48% more in the surrounding retail businesses.

So, how are the UK’s high streets faring?

Despite the pick up in spending ahead of Christmas, average high-street footfall at the start of November was still only three-quarters of the level it was in early 2020, and as low as 53% in London, according to data from Centre for Cities.

Footfall has returned to normal in only a handful of places like Blackpool and Southend.

The Centre for Cities data compares today’s footfall with average levels in February and March 2020. One reason for the differences between cities could be seasonal variations, such as more people travelling to seaside towns during half-term holidays.

However, Valentine Quinio, an analyst at the Centre for Cities, says that this is unlikely to affect the most recent data.

“Comparing November to February, I would assume there’s not that much difference in terms of seasonality,” she says. “When we look at what’s happened in the first week of November, that’s post-half term and so we’re looking at a normal period.”

Is this helping to level up the rest of the UK?

A comparison of the Centre for Cities’ high street recovery index with pre-pandemic average earnings shows that poorer areas have bounced back quicker.

Ms Quinio says that city size and affluence are key determinants of a high street’s recovery.

“Large cities tend to have a high proportion of office jobs, which can be done from home and that’s of course related to affluence,” she says.

“The fact that people are still reluctant to go back to the office explains why we’re still seeing slower recovery in larger cities, while smaller places rely a bit more on the weekend trade and that’s bounced back.”

But, this will not necessarily help to level up smaller, less affluent areas, as many of them had relatively weak local economies to start with.

“In many of these places, the levelling up challenges that they faced – lack of footfall, lack of consumer spending power, high vacancy rates on the high street – all these issues are still there and still need to be addressed,” she says.

“It’s not the restaurant that attracts the high-skilled jobs, it’s the opposite. That means to address the levelling up agenda we need to invest in skills and we need to make city centres a good place to do business.”

The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.

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Business

Ex-Post Office boss Paula Vennells admits removing reference to Horizon IT system from Royal Mail prospectus

Published

5 hours ago

May 24, 2024

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Ex-Post Office boss Paula Vennells admits removing reference to Horizon IT system from Royal Mail prospectus

Former Post Office boss Paula Vennells has admitted to amending the legal document Royal Mail issued to would-be investors before it became publicly owned to remove mention of the flawed Horizon IT system.

Data from the accounting software created by Fujitsu was used to prosecute more than 700 sub-postmasters for theft and false accounting.

Many more victims lost their homes, livelihoods and good reputation to repay non-existent shortfalls.

Now the inquiry set up to establish a clear account of the introduction and failure of Horizon has heard during Ms Vennells’s third and final day of questioning that she removed “at the very last minute” reference to Horizon from the prospectus Royal Mail issued before it was listed on the London Stock Exchange.

A prospectus is a legal and financial document detailing key information for potential company investors.

It was the first time the issue was raised with Ms Vennells.

She said: “It was flagged to me that in the IT section of the Royal Mail prospectus, there was reference to – I can’t remember the words now – but risks related to the Horizon IT system… the line that was put in said that no systemic issues had been found with the Horizon system.”

Ms Vennells wanted the reference removed as, “the Horizon system was no longer anything to do with the Royal Mail group” she said, and contacted the company secretary to have the reference removed.

Based on this action Ms Vennells wrote to a colleague “I have earned my keep on this”.

She was at the top of Post Office for 12 years and served as its chief executive for seven of those, from 2012 to 2019.

In at times emotional testimony, Ms Vennells said she “loved the Post Office” and worked “as hard as I possibly could to deliver the best Post Office for the UK”.

Business

Energy price cap: Average bills to fall by more than £100 – but predictions say they will rise again

Published

8 hours ago

May 24, 2024

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Energy price cap: Average bills to fall by more than £100 - but predictions say they will rise again

The average annual energy bill will be £506 cheaper than a year ago from July, the sector’s regulator has announced.

The energy price cap – which limits what can be charged per unit of energy – is due to fall from the month after next.

It means the average annual bill will be £1,568 a year, 7% less than at present.

But while the July figure is a reduction, bills are still more expensive than before.

Before the energy price shock, caused primarily by Russia’s invasion of Ukraine in February 2022, a standard 12-monthly bill was £1,084.

Money latest: Energy bills fall – but predictions say they will rise again

So compared with three years ago, energy is costing homes an extra £484.

During the current period from 1 April to 30 June, the energy price cap is set at £1,690 per year for a typical bill.

Energy regulator Ofgem sets the cap four times a year, with the latest announcement applying from July to September.

The overall rate of inflation came down in April – in large part thanks to the current higher cap which came into effect that month and brought prices down for energy users, according to the Office for National Statistics.

However, many households are in debt to energy providers.

“The fall in the energy price cap reduces bills slightly, but our data tells us millions have fallen into the red or are unable to cover their essential costs every month,” said Dame Clare Moriarty, the chief executive of Citizens Advice.

“People cannot rely on lower energy prices alone to escape the financial issues they’ve been experiencing. That’s why we need better targeted energy bill support for those really struggling to keep the lights on or cook a hot meal.”

More expense to come

Latest forecasts suggest bills will increase again coming into winter as wholesale gas costs are on the rise.

Respected research firm Cornwall Insight said it expects the fall announced today “may be temporary”.

It predicts a typical bill will increase to £1,762 from October and remain around this level until the end of March.

Gas prices reached four-month highs earlier this week on concerns that Russia could halt gas flows to Austrian multinational oil, gas and petrochemical company OMV and that US exports to Europe may be damaged by a contractor at a Texas terminal filing for bankruptcy protection.

Business

General election 2024: Evidence of weakening in economic recovery as campaigning begins

Published

1 day ago

May 23, 2024

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General election 2024: Evidence of weakening in economic recovery as campaigning begins

Growth in the UK’s powerhouse services sector has cooled by more than expected to its weakest level in six months, according to a closely-watched survey of businesses.

As campaigning got under way for a general election that is widely expected to be dominated by the economy, the S&P Global UK Composite Purchasing Managers’ Index (PMI) suggested an overall slowing in the pace of business activity.

The index, in which any reading above 50 represents growth, came in at 52.8 for May – down on the 54.1 score achieved the previous month.

Money latest: Fashion brand to charge £8.99 for returns

The survey of purchasing managers, which takes in responses from services and manufacturing firms, had been forecast by economists to have been almost flat on April’s figure.

The report said a recovery in factory activity, which recorded its best monthly performance in two years, was more than offset by the weakening of momentum in services which suffered from a slowdown in new orders.

Its authors said the survey data was consistent with gross domestic product (GDP) rising by around 0.3% in the second quarter of the year to the end of June.

The Office for National Statistics has previously indicated an early estimate for growth during the first quarter of the year of 0.6%.

If realised, the PMI prediction for second quarter growth would represent a significant slowdown though it is in line with recent annual forecasts – such as from the Bank of England and International Monetary Fund.

The new year has marked the end of a six-month recession for the UK economy – a downturn that was largely blamed on the effects of interest rate rises by the Bank to tame inflation.

The official rate of inflation is currently just above its target rate of 2% but April’s figure came in slightly hotter than had been expected, prompting financial markets to shift their bets for a first interest rate cut from June to August.

The calling of the election for 4 July means Rishi Sunak’s Conservatives, if that market mood is right, will not benefit at the polls from any cheer over a cut to borrowing costs.

The PMI survey suggested some concerns for the Bank around inflation would be soothed by its findings.

Follow live reaction to the general election campaign

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “With companies now reporting the slowest price growth in over three years, and headline inflation falling close to target, the PMI data support the view that the Bank of England will start cutting interest rates in August providing the data continue to move in the right direction over the summer.

“Such speculation of rate cuts has already fed through to improved business confidence, with optimism for the year
ahead lifting higher in May, adding to hopes that the battle against inflation can be won without the UK having
suffered a serious recession.”