Struggling city centres should end their dependency on retail by replacing shops with offices and housing, according to a report.

The Centre for Cities thinktank said the increasing tendency for consumer spending to shift online was a particular risk for city centres in England and Wales that are overreliant on the consumer.

London still the most desirable city for overseas workers Read more

The retail industry has been hit by a number of high-profile failures and waves of shop closures as the high street has sought to cope with the challenge posed by internet shopping amid a squeeze on living standards.



The report said in successful city centres offices made up two-thirds of the commercial space and the quality of the office space was higher than in other cities. In Bristol and Manchester, which have thriving city centres, retail made up 18% of commercial space.

The Centre for Cities said retail outlets were helped by having large numbers of office workers to sell to.

By contrast, in poorly performing city centres, offices accounted for less than a quarter of commercial space and the quality of that space was inferior to that of more successful economies. In Blackpool and Newport, more than 40% of commercial space was in retail, much of it struggling.

Vacant city centre shops Vacant city centre shops

The lack of office space meant fewer potential customers, leading to average vacancy rates of 16% – almost double the 9% in thriving cities. The report said this made the weaker cities more vulnerable to the continued shift to online shopping.

The report also found that the high number of empty shops in struggling city centres reflected broader economic challenges they faced. Of the five cities with the highest number of vacant retail lots in 2017-18, four – Newport, Blackpool, Bradford and Sheffield – had a loss of city centre jobs. City centres within the greater south-east – the most productive of those studied – had on average much lower vacancy rates than cities elsewhere in the country.

The thinktank recommended that cities with relatively high numbers of shops should convert some of these units into residential and office use. Where demand for offices and homes was weak, some demolition could be needed to enable the land to be used to “improve the public realm”.



Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

The Centre for Cities said the government also had a role to play in city centre regeneration and should consider intervening to supply small amounts of new office space to meet demand from high-productivity firms if the private sector was not building enough offices. It added that government should reform business rates – a tax based on a valuation of a company’s property – to allow more frequent revaluations of premises.

Andrew Carter, the chief executive of Centre for Cities, said: “Each day seems to bring a new crisis for the high street but the answer is not to double down on the declining retail sector. Instead, we need to reimagine struggling city centres as places where lots of different businesses can locate and create jobs – and where lots of people want to go to for a variety of reasons.

“This means reducing the reliance on shops and focusing on creating a more attractive environment for a wider range of firms. We also need to make our high streets more open and appealing spaces for people to spend time or live in, by improving public realm and transport links, and potentially introducing more housing.”