Opinion:
Will high streets become dominated by hospitality businesses rather than retail?

Last week, the BBC reported that one of the UK’s oldest family-run department stores, Eve & Ranshaw, announced its intention to close its doors for the last time on 4 March 2023.

Whilst retailers come and go this one touched me on a personal note as Eve & Ranshaw happens to be in my hometown of Louth, Lincolnshire, where I grew up and many of my family still live.

Eve & Ranshaw has been trading from the same property since 1781. The building is Grade II listed and is a large store covering 2 floors. It is prominently positioned within the centre of Louth, a mid-sized market town – it is an iconic building. I know several people who work there, many of them having worked there for their full working lives. It will be a significant change for Louth and the people who live there.

Growing up, I would visit the store every week with my mum as part of our usual Saturday shopping habits. Shopping habits have undoubtedly changed since then with the boom in online shopping and a move towards experiential retail likely to have taken its toll. Coupled with the effects of the pandemic and now the cost-of-living crisis, the owners have made the difficult decision to close, as the site is no longer commercially viable for them.

It’s heartening to see that the current owner quoted as saying “we want to be the guardians of that building still, and make sure that whoever comes in adds value to Louth.” Whilst purpose-based investing isn’t unheard of, and certainly there’s been a marked increase in “sustainable investing” over the last few years I think this is probably more prevalent to owners of flagship buildings in smaller towns, like Louth, where there is significant historical value to the building coupled with strong local sentiment.  For the time being its often just a matter of whether the numbers stack up in larger markets.

I’ll be following the story with interest to see whether the owner will do a deal with a hospitality operator and how they will make such a large space work for them. Has physical retail had its day in the sun? Will high streets become dominated by hospitality businesses rather than retail? I asked my colleague, Alex Hutchings, a partner in our Real Estate team with a focus on the hospitality and leisure sector for his view:

“Eve & Ranshaw managed to outlast Debenhams so clearly, they got something right, however, consumer tastes have changed drastically in recent memory and it’s vital for retailers to embrace an omni-channel mentality. Over the last couple of months, we have seen retailers from Joules to M&Co restructuring with more rumoured to be calling in administrators in the near future. In all honesty these are brands that are likely to have been in trouble for some time and the cost-of-living crisis has brought forward the decision.

It’s possible that some vacant premises will be taken on by restaurants or coffee shops, and certainly the move to planning use class E has made this transition easier. Yet, if we look at the wider picture many retailers are reporting increased footfall in their physical stores over the critical Christmas trading period and M&S has recently announced plans to open 20 new stores (eight “full line stores” and 12 food halls). It’s not yet clear whether the move back to physical retail is as a result of people wanting to shop in person to assist with budgeting or because they crave the retail experience. Nevertheless, its clear there is still a demand for well-located physical retail.”