Hospitality at the core of high street growth as retail shifts online, report shows

A thriving hospitality and leisure sector is a key part of strong high streets as retail continues to struggle to operate, a report from thinktank Centre for Cities has revealed.

The group's analysis found strong high streets across the UK had an average of 24% food and leisure services as part of their high street offering with 9% of locations vacant, compared to weak city centres where 15% of the offering was service based and 16% of locations were vacant.

This also tracked over to the amount of the city centre devoted to office space. Successful high streets were found to have given 62% of floor space to offices, while weak city centres devoted 23% - with the difference largely being made up by retail.

Report analyst Rebecca McDonald told The Caterer this came down to city centres operating as a diverse ecosystem, with interaction between high skilled business and service industry outlets.

She said: "What we find is that stronger city centres tend to have a higher share of their high street taken up by food and drink versus weaker ones. What we draw from that is stronger city centres, because they've got more footfall and they've got more customer spending power, they've been able to adapt naturally towards this new mix; whereas in weaker city centres they've got less footfall, less spending power and as a result they haven't been able to adapt in the same way. That's why they're struggling, and that's why they've got lots of vacancies."

She added the report's findings showed that despite claims of doom and gloom across the UK's high streets, the picture is less clear cut. "Some high streets are actually doing really well and that tells us certain things about what is causing other high streets to struggle. High streets need to evolve from being retail focused to having a bit more of a diverse mix of businesses on them.

"So in terms of hospitality, that means having a bit more of a mix of, say, food and drink, and leisure, mixed among the retail. As well as also having more offices, more homes, and having less of a dependence on retail because retail will be less and less dominant on the high street in terms of physical space going forward."

The report goes on to make suggestions for legislators, in particular releasing funding to remodel weaker city centres unable to reform naturally through their own economy, allow city planners more control over how space is allocated and improving the skills of local residents.

Centre for Cities chief executive Andrew Carter added: "

"Instead of trying to replace failed shops with more retail, investors and policy makers should focus their strategies on making struggling city centres attractive places to do business and spend leisure time - not just to shop."