UK high streets struggle while it’s boom time in Dubai

High streets across the UK are struggling: footfall is collapsing and consumers’ spend is going down. Across the UK, there are countless examples of parades of boarded-up shops in what were once-thriving market towns and busy city centres.  Several long-established businesses such as Peacocks and Blacks have been pushed into administration in recent months. And, as I write this, it looks like the greeting card chain Clinton Cards could be next.

The response from many struggling retailers is to invest in digital and benefit from the growing number of people who want to shop from the comfort of their own homes and offices. If the likes of Amazon can create a highly profitable business, then why can’t others emulate it, goes the thinking.

But, why, in other parts of the world, are shopping malls busy and consumers still spending . Take Dubai as an example; I was out there for a few days recently and found shopping malls booming – people were laden with shopping bags from designer stores and out in force after a day in the office. My friend, who lives out there, could identify that many were Saudis who were treating Dubai’s malls as their playgrounds. It is, of course, far quicker to jump on a plane to Dubai or one of the UAE’s other emirates than it is to jet all the way to London. These days many famous British brands, such as Hamleys, are owned by Middle Eastern investors and have outlets in the Gulf anyway.    

And then of course there are the expats from Britain who live permanently out in Dubai. If they were born in the UK then going out and spending money in shops is probably the only way they know. They have the disposable income, so they spend, spend, spend.

But perhaps the biggest reason explaining why shopping malls in Dubai are booming is that online shopping is almost non-existent.  As people in the emirate don’t generally have postal deliveries to their homes making purchases on the Internet becomes very difficult.  Organisations pay for postal boxes at local post offices where they can pick up deliveries on a daily basis, yet this is mainly used for business purposes. In any case, it is hardly worth companies like Amazon investing in somewhere like Dubai when the market is so small – they would be building a distribution centre for a place with a population on par with the likes of Birmingham. All this means that Dubai’s shopping centres, the nearest we have to high streets, have something of a reprieve from the switch to consumers moving online.  

And so we are back at the UK and whether it matters that are high streets are in terminal decline in the face of falling consumer confidence and increasing Internet purchases. On the one hand, we can’t go back to the time when so many purchases were bought using cheap credit – our economy needs to recover and we can’t artificially keep the high street afloat. But at the same time we thrive on nostalgia, with brands like Marks & Spencer and WH Smith helping us connect with the past.  And it is an important place for social interactions – it gives people a place to meet.  

So perhaps we need a compromise. In towns where shop after shop is boarded up, the solution could be to reduce the space given over to retail. If shops are concentrated in one particular area, then the rest of the space could be converted into affordable housing or devoted to community centres, such as libraries. We don’t have the luxury of a shopping monopoly, as bricks-and-mortar shops have in Dubai, so perhaps this idea of matching the supply of shops to demand could prove the best solution?