Beyond the headlines: what’s really happening to Britain's high streets?

Knight Frank experts explore how retailers, investors and communities are redefining the role of the modern high street

Ellie Pryor

17 September 2026

4 mins read

Beyond the headlines: what’s really happening to Britain's high streets? — Photography by Juan Trujillo Andrades

Britain's high streets have long been viewed as a barometer of community wellbeing, reflecting not only how we shop, but how we live. With the future of UK high streets firmly on the political agenda, the reality of modern retail is far more nuanced than the headlines often suggest. From an investment perspective, retail was the strongest-performing property asset class last year, delivering a total return of 8.2%, compared with 5.9% across the wider property market.

To explore the forces reshaping the sector, Knight Frank's Head of UK Markets Insight, Stephen Springham, and Will Lund, Head of Retail Capital Markets, discuss the retail trends driving growth, how successful retailers are adapting to changing consumer behaviour, and what makes a thriving high street today. These themes and more are explored in greater depth throughout Knight Frank's Retail Renaissance series.

There's a lot of talk about the high street dying. How true is that?

Stephen: The high street is worth around £480 billion a year in retail sales and is growing faster than the wider economy, so it always feels slightly misleading when people describe it as "dead". That said, the sector has undergone profound structural change over the past decade and beyond. Online shopping is the most visible factor, but it's far from the only one. The pandemic accelerated trends that were already underway, creating a major reset for the industry. From a purely property perspective, however, retail overall is now the strongest-performing asset class.

Will: Retailers have to work harder than they did in the past. We lost a number of weaker brands during and immediately after the pandemic, but the businesses that survived are generally stronger, better capitalised and more customer-focused. Retailers such as Next and M&S recognised they needed to evolve, invested in their stores and product ranges, and are now seeing the benefits.

To what extent does online shopping impact the high street?

Stephen: The conversation is often framed as a battle between online and physical retail, but most successful brands operate across both. Online penetration has stabilised at around 28%, and growth is increasingly being driven by multichannel retailers rather than online-only operators. Consumers shop brands, not channels. For a period, investment shifted heavily towards fulfillment and logistics, often at the expense of stores. Now we're seeing that balance change, with retailers reinvesting in physical locations. John Lewis's £800 million transformation programme is a good example.

Will: Most retailers now view online as an important part of their ecosystem, rather than the be-all and end-all. During the pandemic, online sales surged because consumers had little alternative. Today, most retailers have mature digital platforms, but those platforms are expensive to operate. Industrial rents and business rates have risen rapidly, and maintaining a network of warehouses can be just as costly, if not more so, than running a large national store portfolio.

Women shopping in Tunbridge Wells

How has the way retailers invest in stores changed?

Will: No store is untouchable anymore. Retailers often used to focus on being present in a defined group of top-tier locations. Today, every store is assessed on performance. If a location isn't contributing to the business, it will close. Equally, retailers are finding success in markets that may once have been overlooked because local property economics can be very attractive.

Stephen: Retailers have become far more selective and forensic. Stores must either generate profit or support the wider multichannel strategy. Underperforming locations are gradually being removed, while stronger opportunities continue to be added.

Is there an imbalance between retailer demand and available space?

Will: In out-of-town retail warehousing, there is a clear supply-demand imbalance in favour of landlords. National vacancy rates by some measures for retail warehousing are below 2%, and in certain markets there is virtually no available space. As a result, retailers are increasingly willing to pay premiums to secure the right locations, something we haven't seen for 15 to 20 years. At the same time, not all retail space is equal. Some town centre properties are highly sought after, while others no longer meet the needs of modern retailers and struggle to attract demand.

Stephen: While the overall national retail vacancy rate hovers around 14%, much of that floor space consists of units that are no longer fit for purpose. National averages can mask significant local differences, and every town or city has its own dynamics.

Shopping in Wandsworth

Is retail high on investors' shopping lists?

Will: Out-of-town retail remains a core component of many institutional portfolios, such as pension funds. Supply is limited because owners tend to hold these assets for extended periods. We're also seeing growing interest in large regional shopping centres. Major investors such as Landsec have significantly increased their exposure to retail, even disposing of assets in other sectors to fund acquisitions.

Town centre retail has improved to an extent where it is now a readily accepted asset class. More widely, retail's strong recent performance has reinforced confidence among investors. While investment strategies vary by segment, retail is firmly back in focus.

What makes a successful high street?

Stephen: Successful high streets are fundamentally those that reflect the needs of their local communities. Consumer expectations evolve over time, and there is no universal formula for success. The right mix between independent businesses and national brands will vary from one location to another.

Will: Leisure is also becoming an increasingly important part of the town centre mix, helping create destinations that remain active beyond traditional shopping hours. While independent retailers add character and diversity, larger occupiers also play a vital role. Businesses such as the major supermarkets provide essential services and drive regular footfall, helping to sustain wider town centre ecosystems. Ultimately, successful high streets are those that strike the right balance.