Covid-19 has ‘levelled down’ prosperous high streets, but poorer areas face bigger problems this year
Covid-19 has cost businesses in city and large town centres more than a third (35%) of their potential takings and shut down thousands since March 2020. This is according to Cities Outlook 2022 – Centre for Cities’ annual economic assessment of the UK’s largest urban areas.
Central London is worst affected, losing 47 weeks of sales between the first lockdown and Omicron’s onset. Businesses in Birmingham, Edinburgh and Cardiff city centres are also among the worst hit; all have also lost nearly a year’s worth of potential sales.
Across the 52 city and town centres studied, 2,426 commercial units have become vacant during the pandemic, against 1,374 between 2018 and 2020. In many prosperous city centres, lost sales are linked to an increase in business closures. In Oxford and Newcastle city centres the number of empty storefronts increased by around eight percentage points as sales fell.
Burnley’s city centre lost the fewest weeks of sales (8 weeks) during the pandemic, followed by Warrington and Huddersfield.
High streets in economically weaker places have been less impacted by Covid-19. In the years before it hit, store vacancy rates in the centres of places such as Newport, Sunderland and Blackpool increased by around 3.6 percentage points. Since 2020 this has surprisingly fallen to 2.5 percentage points – despite restrictions. Meanwhile in economically stronger places, business closures increased by 3.5 percentage points during the pandemic – up from 1.4 percentage points in the two years before.
This suggests that the Government’s Covid-19 support successfully stalled the decline of many struggling high streets but was less effective in economically stronger places due to higher rents and a lack of custom from office workers.
That said, while stronger cities have borne the economic brunt of the pandemic, their higher levels of affluence mean that, if restrictions end and office workers return, they will likely recover quickly.
Meanwhile, while government support has sheltered weaker places, it may have simply stored up pain for the future. The report warns that many less prosperous places in the North and Midlands face a wave of new business closures this year.
To avoid permanently levelling down prosperous places, policy makers should run campaigns to encourage leisure visitors back when safe to do so and provide part-time season tickets to encourage workers back to the office.
For struggling places, policy makers drafting the Levelling Up White Paper should focus on dealing with struggling places’ fundamental economic problems to address high street decline. This means investing in skills and ways to strengthen the wider local economy to increase money in shoppers’ pockets, rather than on ‘cosmetic’ quick fixes such as hanging baskets and painting shop fronts.
Andrew Carter, Chief Executive of Centre for Cities, said:
“While the pandemic has been a tough time for all high streets it has levelled down our more prosperous cities and towns. Despite this, the strength of their wider local economies means they are well placed to recover quickly from the past two years.”
“The bigger concern is for economically weaker places – primarily in the North and Midlands – where Covid-19 has actually paused their long-term decline. To help them avoid a wave of high street closures this year the Government must set out how it plans to increase peoples’ skills and pay to give them the income needed to sustain a thriving high street. Many of these places are in the so-called Red Wall so there is a political imperative for the Government to act fast, as well as an economic one.”
Notes to editors:
Copies of the report are available upon request and data for all the cities studied is available upon request.
About Centre for Cities
Centre for Cities is a research and policy institute, dedicated to improving the economic success of UK cities. We are a charity that works with cities, business and Whitehall to develop and implement policy that supports the performance of urban economies. We do this through impartial research and knowledge exchange.