Monday, May 23, 2022

Pandemic has cost some East Midlands cities more than half a year’s worth of high street sales

Covid-19 has cost some city and large town centres in the East Midlands more than half a year’s worth of potential takings since March 2020. This is according to Cities Outlook 2022 – Centre for Cities’ annual economic assessment of the UK’s largest urban areas.

Central Nottingham is worst affected, losing 40 weeks of sales between the first lockdown and Omicron’s onset. Businesses in Leicester and Derby city centres are also among the worst hit.

Northampton city centre lost the fewest weeks of sales (12 weeks) in the East Midlands during the pandemic.

Where have city and town centre businesses lost the most potential sales during the pandemic?
Rank (Regional) Rank (National – out of 62) Place Weeks of lost sales
1 9 Nottingham -40
2 18 Leicester -36
3 23 Derby -32
4 57 Mansfield -13
5 58 Northampton -12

 

Nationally, Covid-19 has cost businesses in city and large town centres more than a third (35%) of their potential takings since March 2020, with central London, Birmingham, Edinburgh and Cardiff worst affected. 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.

High streets in economically weaker places have been less impacted by Covid-19. Meanwhile in economically stronger places, business closures increased during the pandemic.

Where have city and town centre vacancy rates changed the most during the pandemic?
Rank (Regional) Rank (National – out of 52) Place Percentage point change
1 4 Northampton 6.2
2 16 Leicester 4.0
3 17 Derby 3.9
4 23 Nottingham 3.2
5 42 Mansfield 1.0

 

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 city centres 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 East Midlands face a wave of new business closures this year.

Where had the highest and lowest shares of vacant city centre units after June 2021
Rank (Regional) Rank (National – out of 52) Place Percentage of city centre units vacant
1 8 Northampton 24.5
2 11 Derby 23.3
3 17 Leicester 21.6
4 26 Mansfield 18.8
5 33 Nottingham 17.4

 

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 more prosperous cities and towns in the East Midlands. 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.”

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