The Internet Didn’t Kill the High Street, Inequality Did

The high street is dead – or so we are repeatedly told. The reasons are recited with eager predictability: the rise of the internet and online shopping; the growth of retail parks; supermarkets swallowing specialist trades like butchers and bakers; the fact that many products we used to buy in shops – newspapers, CDs – are now services we access through personal devices.

While all of this is true, it isn’t the whole story.

This is Waterlooville, in Hampshire.

My wife’s friend took this video and was kind enough to let me share it.

While politicians and the London media live in a parallel universe this is reality for much of UK. Economic malaise & high streets that look like a zombie film. pic.twitter.com/A9mtAfhkDT

— Aaron Bastani (@AaronBastani) January 9, 2024

For a start, it does not explain why many successful high streets in Britain endure. Those in historic cities like York and Edinburgh feel prosperous and well-kept, with occupation rates visibly higher than in surrounding areas. The country’s urban magnets – London, Manchester and Birmingham – inevitably attract talent and investment by virtue of their sheer scale. Finally, high streets in some smaller towns and villages – think Totnes or Hebden Bridge – continue to thrive because of their unique character. All this, despite the trends supposedly killing bricks and mortar.

Nor does it explain why high streets across much of Europe, where all the same factors supposedly killing off our high streets are also at play, look and feel significantly better. Travelling across Poland in 2022, I was struck by how much nicer Wroclaw seemed than Leeds, or Poznan than Leicester. Spain, Germany, France and Italy have the internet, and supermarkets too, yet have retained their urban fabric in a way Britain has not. Whenever a quality of life survey is published identifying the premier cities in which to live, European contenders are invariably Scandinavian and central European. Salzburg and Gothenburg bustle in a way Newcastle and Southampton do not. For some reason, Brits now take this for granted, accepting the logic that our high streets are shit, because, well, the internet.

And yet there is growing evidence that offline retail can succeed – even in Britain. Amazon may be synonymous with buying books, but Waterstones has opened dozens of new stores in recent years. Despite the best efforts of Jeff Bezos, the number of independent bookshops across the UK reached a decade high in 2022.

Global megabrands like Lego and Ikea are also betting big on Britain’s offline retail growth. Later this year, an Ikea is due to open on the site of Topshop’s former flagship store on Oxford Circus. The Swedish giant plans another store in Brighton, while much smaller “plan and order” shops are destined for Preston, Aintree and Stockport.

Counterintuitively, the internet may lead Ikea to smaller, more local outlets rather than out-of-town superstores. After all, continued urbanisation is just as real a trend as the digital economy (population growth remains strongest in city-regions) and younger people, even adjusted for age, are less likely to drive than previous generations. Lego, meanwhile, has tripled its number of stores since 2017; the company now boasts 19 in the UK. While most former department store sites remain vacant, in wealthier places they are starting to reopen: Bradbeers in Salisbury, Frasers in Norwich.

This all signals two things. Firstly, we are now at a point where the mobile internet and online shopping could lead to new stores opening as much as closing (that is certainly Ikea’s bet). Secondly, the much-reported death of the high street is as much a story of inequality as it is of technology. After all, nobody is expecting department stores to re-open in post-industrial areas any time soon.

Exemplary here is prosperous, but comparatively small, Winchester. England’s former capital boasts not only one Waterstones but two. In similarly-sized Poole, the company has no presence. Both places have the internet, and are located in the south of England, but only one has people flush with cash and benefits from proximity to Britain’s only megacity; Winchester is on the outer ring of London-okyo.

Your nearest high street is probably shit because Britain has some of the highest regional inequality in the world, as well as a massively outsized capital when it comes to wealth. In Iceland and Sweden, I can’t recall seeing an empty shop front. I don’t think it’s a coincidence that both countries enjoy low levels of income inequality.

Compounding this problem is an attitude, shared by much of the political and media class, that regional inequality – and by extension dying high streets – aren’t of political concern. Most of the London media (though not all) has little interest in unfashionable places outside the M25. To them, the “technology is killing our high streets” story is appealing because it is simple, intellectually unchallenging and doesn’t require subsequent action.

In the face of big tech and monopolies, other countries take a different approach. In France, which has three times the number of independent bookstores as the UK, the government introduced a minimum delivery charge so booksellers could compete with Amazon. That is sensible policy because such businesses generate powerful economic and social returns, from keeping cash in local economies to fostering a stronger sense of community. Germany, like France, has fixed prices for books regardless of the platform they are sold on.

Yet such policy prescriptions are considered outlandish by politicians on this side of the Channel. After all, recognising the root cause of a problem carries the implicit possibility of correcting it. Far easier to indulge in ambiguous, fluffy thinking and declare the challenge intractable. If only we could do something about it – but we can’t.

There is a final reason why the political class neglects the high streets question: few of them have any relationship to small business. Labour politicians generally hail from the NGO-charity-law industrial complex – I can’t think of a prominent member of Starmer’s cabinet with a background in SMEs. Meanwhile, leading Tories often come from finance (think Rishi Sunak and Richard Sharp) or media and PR (David Cameron and Boris Johnson).

On both sides, the figure of “business” is more likely to mean multinationals, financial services, and enigmatic “consultants” rather than anyone running a pub, cafe or shop. This perhaps explains why, during a cost of living crisis, the Conservative party obsessed over inheritance tax while Germany cut VAT by 7%. In Berlin, family-owned businesses are the most feared political constituency. In Westminster it is ageing, asset-rich homeowners.

So yes, the internet has permanently changed how we shop. But that’s no excuse for town and city centres looking like something out of a zombie movie. We are implored to accept the inevitability of technological change, precisely because that depoliticises questions of who has cash to spend. High streets, and their unevenly distributed downfall, are about regional and income inequality. For decades we’ve been told that diverging incomes, by place and profession, is the cost of national success. Walk down your nearest town or city centre and decide for yourself.