Put shops near the top of our industrial strategy
Mace's Head of Retail, Jeremy Davey, writes for Estates Gazette about putting shops near the top of our industrial strategy.
One of the most pivotal moments in the year ahead will be the rolling out of business secretary Greg Clark's much-anticipated industrial strategy.
This fresh effort to boost our national industry is certainly to be welcomed, especially if it goes hand in hand with a renewed focus on rebalancing the national economy by strengthening those of the regions. Incentives to encourage new "disruptive" companies, to increase the productivity of UK research and development and to stimulate the growth of our transport networks are all expected to feature heavily. Less obvious, perhaps, will be the link between our industrial infrastructure and retail sector.
The latter has seen enormous change over the past few years and has arguably been at the forefront of industry disruption, having witnessed the shift to online shopping. While this is having an incredible impact on the UK, the decline of "traditional" shops in many town centres should not be misinterpreted, as in-store retail is still the choice of the majority, with more than 85% of UK sales taking place offline.
The planned industrial strategy is an opportunity for Government to capitalise on this. Boasting more than 290,000 shops, around three million employees and £94bn of economic output, retail is the UK's largest private sector employer. However, the types of shops we are keeping has changed. At Mace, we have seen mixed-use schemes and contemporary retail hubs make their mark across the country.
The transformation of New Street station by the Grand Central retail centre, with John Lewis as an anchor tenant, has seen Birmingham move from 12th to third in the national retail rankings. If Government was to introduce retail enterprise zones with preferential business rates and planning to support growth in the sector, it would take an important step towards reviving our flagging high streets and provide greater flexibility to both local councils and retailers.
Retail has the capacity to create jobs quickly in comparison to other industries and has been instrumental in helping the UK economy recover from the last financial crisis. With many uncertainties remaining around Brexit, a recent report by Mace argues a focus on retail should remain central to the industrial strategy to protect jobs. In particular, we believe that developing retail enterprise zones would ensure at least 25,000 new jobs are created in the North alone.
This would be a quarter of the 100,000 additional jobs that could result from enterprise zone creation in retail over the next five years. Many high streets are struggling to retain the traders vital to a thriving retail sector. Therefore, an industrial strategy that supports the creation of retail enterprise zones would ensure the provision of areas offering reduced business rates for city centres and high streets that are struggling or are potentially fast-growth areas. We must ensure retail is a priority in the industrial strategy, not just an add-on.
First published in Estates Gazette.