There’s really nothing more depressing than a neglected local main street shopping precinct. Vacant shops, struggling retailers and a smattering of shoppers are signs that a main street has reached the lowest ebb in its lifecycle.
Fortunately, main streets tend to rise as well as fall, and things can only get better for main streets that have slid into a trough.
Through our work on main street revival projects, we have uncovered plenty of data that we can use in conjunction with local governments, to create successful main streets.
The seven stages in the life of main streets.
The main street economic cycle goes through seven quite distinct steps:
- Run-down shops and centres, worth little to landlords, tend to attract community-centric retailers and service providers who are happy to trade off the downside for the cheap rents.
- As these businesses become cherished by the locals, the street starts to gain character and to flourish. The under market rents allows main street traders to invest in their businesses, and become more successful.
- Local investors – such as mum and dad super funds – buy into the main street and are happy to have returns of 4%-5% on their investment. Rents stay low and centre continues to flourish.
- Investors – new or existing – start to ramp up the rents and market the centre, increasing its profile and value.
- National chains and services buy into the area forcing up rents and forcing out the community businesses.
- Vacancies start to appear and community support wanes.
- The street drifts back towards phase 1 – becoming run down and undervalued again.
Local authorities can do quite a lot to mitigate this kind of cycle, and we will examine those interventions later in this article.
More factors leading to main street decline
Other factors can also drain main streets of their lifeblood. The global and local economic conditions can have an impact, as can changes to the amenities in surrounding suburbs.
Rokeby Road, in the Perth suburb of Subiaco, illustrates this point, which is just four kilometres from the CBD. Its historical significance and quirky community-focused retail helped develop it into a vibrant main street until 2009.
Local governments, seeing Rokeby Road’s success, not only imitated the model but also adapted to changes in community demand for hospitality offerings especially small bars. Just as rents were climbing in Rokeby Road, and national chains and service providers such as banks moving in, the local traders had viable alternatives in neighbouring suburbs, and the road went into decline. It’s now the subject of major initiatives to address the cycle.
High Street Penrith has a long history starting in the 1880’s and thriving right up until 1960 as a result of initiatives such as the Great Western Road and a railway. But when the M4 motorway was finished, High Street went into decline. A competing shopping centre, Penrith Plaza, drove the High Street into further decline. An attempt to arrest the decline by creating a High Street pedestrian mall was a disaster and led to all-time high vacancy rates in 1995.
It wasn’t until the mall was ripped out, and car traffic allowed back into High Street that the return to prosperity began.
The five steps to thriving main streets
Grim as these stories are (and there are many more), they provide us with very valuable information about how to combat main street decline. Even if we cannot completely arrest the cycle, local governments, working in conjunction with main street traders and the local community, can do a lot to smooth out the ups and downs of main street shopping strips.
Step 1: Don’t rely on tenancy mix
Main streets shopping strips do not have the same controls over tenancy mix that their rivals – the major shopping centres – have. Most main streets have multiple landlords who will rent to the highest bidder.
Retailers move in and out in response to community expectations and demand and rent levels, and when the rent levels go up or down and community expectations and demand changes so do the retailers.
Of course, a good mix of tenants will make the main street thrive, so how can this be achieved?
The answer lies in local planning authorities keeping up to date with community expectations and demand, and making sure there is plenty of flexibility to allow premises to adapt from one use to another, for example, from flower shop to café. Working with landlords and providing more flexibility in planning guidelines means adaptation to changing community demands is not prohibitive.
Step 2. Invest in place
People like to gather in places that interest and entertain them, and local authorities can do a lot to foster the character of main streets. This might mean protecting some of the street’s history – buildings or amenities – as well as encouraging new construction that is welcomed by the community and seen to add to its value.
Step 3. Build amenity
Adding public seating, good lighting and planting trees to shade walkways can make a big difference to how the community uses the street. Curbside café tables, pocket parks and community facilities such as the local library add to the mix of uses in the main street and increase foot traffic and retail opportunities for traders.
Another great idea is to provide flexible parking options. For example, instead of restricting street parking by the hour, permitting pay-on-exit car parks allow shoppers to more easily extend their stay.
Most consumers today expect free Wi-Fi in public places. The advantage for main streets is, again, that it encourages visitors to stay for longer and spend more.
Step 4. Work with retailers to build a business beyond the local market.
Retailers will survive local and global economic ups and downs better if they build their business beyond the local market. Selling products and service online, offering home delivery, and duplicating retail offers in neighbouring suburban main streets are all strategies that can build resilience into the main street business model.
Step 5. Proactive local government planning
Successful main streets need leadership from local government. History tells us that success relies on a mix of economic development, community buy-in, planning and design, and marketing.
Main streets are democratic and quirky by their nature, and this is both a strength and a weakness. Well-funded marketing campaigns from competing shopping malls can outgun main streets. On the other hand, the local strip has character and can change quickly in response to changing community demand.
The benefits for local government of a thriving main street – a thriving local economy with rising house prices and corresponding rates – make it worthwhile for local authorities to help co-ordinate traders and consult with the community.
And, with plenty of community support, main streets need much smaller marketing budgets than shopping centres.
The fall is quicker than the rise
Main streets tend to fail fast and to be slow to recover, costing local communities money and effort to revive.
Keeping an eye on the health of main streets, using the steps above, and continual small injections of investment can keep main streets resilient and loved community centres.