By Sarah Gordon

The high street is dying. Not, it seems, the high streets of big metropolises such as London or Birmingham, but those of smaller towns and cities across Britain.

Mary Portas, Queen of Shops, has advised the government on what can be done. But the challenges for retailers are many – and the winners and losers are far from obvious.

Clearly, doing well on the internet will help. According to the Office of National Statistics, 12 per cent of all UK retail spending is online. In some categories, such as music and video, over half of all shopping is on the net, says Verdict Research, a consultancy.

Indeed, rather surprisingly, UK consumers spend more on the internet than any other nationality. In 2010, according to Euromonitor, Brits spent £378 a head online, compared with £222 in the US and just £6 in China.

This means people in the UK go out shopping less. And they shop on the high street much less – estimates suggest there are a fifth fewer people on the high street now than five years ago. Instead, if people do leave their sofas, it’s to visit “destination” locations such as Bicester Village or Bluewater.

Add the double whammy of a weak economy, and the result, according to research by Morgan Stanley and retail consultancy the Local Data Company, is that about one in seven retail stores in the UK now lie empty.

Some retailers are suffering more than others. Mothercare plans to get rid of more than a quarter of its UK stores to reduce its high street presence. Arcadia, owner of Topshop and Dorothy Perkins, will close 250 stores over the next three years. Others are also exposed. Boots The Chemist has a large proportion of its nearly 2,500 stores on high streets in struggling town centres.

And, paradoxically, for some retailers the trend means that what was previously regarded as a strength could now be construed as a weakness. Chains that rent their stores, Morgan Stanley argues, are in a better position to get out of dying high streets than those that own them. Marks and Spencer and Next, for example, have a roughly similar presence in weak town centres. But Next leases most of its stores and can therefore choose not to renew expiring ones.

Marks and Spencer, however, owns about two-thirds of its stores, and probably a higher proportion of its high street stores. Selling these could well prove a challenge – what demand would there be for such a large retail space in a struggling town centre?

This won’t matter so much for M&S’s books, where its property is valued at the cost at which it was bought (often decades ago). But M&S, like several other UK companies, is helping fund its staff’s pensions by putting assets like property into its pension fund.

Such moves seemed a creative response to the perennial problem of UK companies’ pension deficits. But if M&S’s property turns out to be less valuable than foreseen, yet more imagination will be needed.

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