Why bank branch closures need not be a death knell for the high street
With Lloyds, Halifax, the Bank of Scotland and Barclays all shutting branches, a lot of gaps will appear in high streets. But this should be seen as an opportunity, argues NationalWorld money editor Henry Sandercock
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On Friday (2 June), Lloyds Banking Group - the giant that owns well-known national brands Lloyds Bank, Halifax and Bank of Scotland - and Barclays both announced they would be closing 63 branches over the next 12 months.
The move - a response to the growth in internet and mobile banking - is likely to grow the post-2015 ‘banking deserts’ NationalWorld reported on in April. It is also set to lead to some big gaps on high streets up and down the UK.
The shuttering of these branches will add to the holes left by the scores of major chains and hospitality venues that have succumbed to the challenging economic environment (and, in some cases, the corporate greed) the UK has struggled with since Covid-19 struck. Some high streets still even bear the scars of pre-Covid failures, including that of BHS.
Given interest rates are set to climb again, and the cost of living crisis is showing little sign of budging, you would expect more big names to disappear from the UK’s shopping districts over the coming months. But this gloomy picture need not be the death knell for the high street. In fact, I think it could give it space for its rejuvenation.
High streets are still the central hub of towns and cities across the country. Although footfall remains 21% down on pre-Covid levels, according to British Retail Consortium (BRC) statistics, it has been bouncing back since coronavirus restrictions began to ease in 2021, and at a stronger rate than shopping centres and retail parks.
While the advent of online shopping and banking has meant we’re no longer using them as a one-stop shop for errands, their centralised positions in our urban areas still make them an ideal place to meet up with friends and engage in activities. For this reason, empty stores should be viewed as an opportunity.
They could become centres for the arts, or exercise hubs, or destinations for pop-up restaurants that showcase our diverse country’s range of cuisines. When you go to your town centre, you could nip into a drawing workshop before heading on to a spinning class and then refuelling on Pakistani street food.
Not only would such ventures improve our sense of community, they could also attract more people to high streets at all times of the day, bringing economic benefits for all the other retailers along them, as well as the urban centres they are situated in. The great thing is, this is already happening in some parts of the country, from Havant to Leith.
To get other areas involved, we need to make some fundamental changes to how high streets are run. Instead of being treated as cash cows by landlords and local authorities, there needs to be a greater acceptance that retail chains are heading online and that the days of homogenous high streets are almost over.
To help things along, the government could create a grants system that helps to subsidise the cost of commercial rent and business rates for any independent businesses or charities wanting to fill a vacant high street store over a period of months. In tandem with its levelling up plans (which have almost passed through Parliament) that will allow local authorities to force landlords to let out empty shops, this funding pot could give our high streets breathing space in which to prosper.
With the cost of living crisis and economic pressures likely to remain with us for some time yet, I don’t expect this transformation to happen overnight. Indeed, Mary Portas suggested something similar in a government review in 2011. But the sooner we can make our high streets destinations once more, the better we’ll all be for it.