THE HIGH STREET HAS A NEW JOB TO DO

The headlines say consumers are abandoning physical retail. The evidence suggests something more complicated.

For years, the story has been familiar. High streets are struggling, footfall is falling, online shopping is growing, retailers are closing stores and the economics of physical retail are becoming harder to justify. For fashion in particular, the question increasingly seems obvious: if customers can discover, compare and buy almost anything from their phone, why do they still need to visit a store?

Our view is that the answer is more nuanced. The high street isn't dead. But the old reason for having a store is.

The distinction matters because the evidence does not point towards consumers abandoning physical retail altogether. It points towards consumers becoming much more selective about which stores they visit, why they visit them and what they expect to get from the experience. The question for fashion businesses is therefore no longer simply whether they should have stores. It is what those stores are actually there to do.

The headline numbers are difficult

There is no point pretending the physical retail environment is easy. UK high-street footfall remains under pressure, while online continues to play an increasingly important role in non-food retail. In July 2026, BRC data showed non-food sales declining 0.7% year on year, with in-store non-food sales down 1.9%, while online non-food sales increased 1.3%. The month was also affected by unusually hot weather, which kept some shoppers away from high streets.

The Office for National Statistics provides useful context. Overall retail sales volumes fell 0.5% month on month in July, but remained above the previous year, while the ONS cautioned that monthly movements can be volatile and should be considered alongside longer-term trends. Clothing and footwear were among the weaker areas during July, following stronger trading in June.

That matters because a fall in footfall is not automatically evidence that consumers no longer want physical retail. People may be shopping online. They may be visiting fewer stores. They may be changing the type of location they visit. They may be combining fewer physical trips with more digital research. Or, as July demonstrated, external factors such as weather can temporarily change behaviour.

The headline footfall number tells us that fewer people may be entering a particular retail environment. It does not, by itself, tell us whether the physical retail proposition remains valuable.

Look at what the strongest retailers are actually doing

Perhaps the most interesting evidence comes from what major retailers are investing in.

If physical retail were genuinely becoming irrelevant, we would expect the strongest businesses to be systematically retreating from stores. Instead, what we are seeing is something more sophisticated: retailers are becoming much more selective about physical space while investing more heavily in the stores they believe can create a genuine customer and commercial return.

Marks & Spencer is one of the clearest examples. M&S is not simply maintaining its existing estate. It is reshaping it around what it describes as the “right stores, in the right place, with the right space”, with an ambition to operate around 200 full-line stores by 2027/28 while continuing to invest in new and renewed locations.

The nature of those investments is revealing. M&S's new and renewed stores are increasingly being designed as broader customer destinations rather than conventional department-style shops. Its Bath store combines Fashion, Home & Beauty and Food with hospitality across four floors, while its Bristol store has been developed as a major fashion and beauty destination. Its Oxford Street Pantheon flagship, opened in 2026, is almost 100,000 square feet and is being used as a research-and-development environment for the future store estate.

That is not the behaviour of a retailer that believes physical retail has no future.

It is the behaviour of a retailer that believes the wrong physical retail has no future.

Primark provides a very different example, but the underlying signal is similar. Associated British Foods reported that Primark's UK sales grew 1% in its third quarter of 2026, while the business continued to invest in its physical estate. Primark has also increasingly connected its stores with digital services such as Click & Collect, turning the store into part of the customer's broader journey rather than treating it as an alternative to online.

That is important because it challenges the old store-versus-online argument. A customer can discover a product online, check availability, visit a store, try it on, collect an order and then buy something else while they are there. Digital can drive the store, while the store can make digital more valuable.

John Lewis is taking that idea even further. The partnership is investing £800 million across its stores and digital experience, with the aim of transforming its 36 shops into destinations where customers can discover, explore and experience products. It has been investing in hospitality, personal services, fashion, sports and wellness, while using physical locations to create experiences that are difficult to replicate through a website.

Its approach is particularly revealing because it asks a fundamentally different question of the store. Instead of asking “How do we get people into the shop to buy something?”, the question becomes “What can we give people a reason to come here that a website cannot?”

That is the future of physical retail.

The store is becoming a destination, not simply a transaction

For decades, the traditional store was designed around a relatively straightforward model: get the customer through the door, present the product, complete the transaction and get them out again. That model becomes increasingly difficult to defend when almost every product can be searched, compared and purchased online.

The future store therefore needs to provide something additional. That could be discovery, expertise, service, hospitality, community, entertainment or simply the confidence that comes from seeing and experiencing a product in real life.

Fashion has a particular advantage here. A customer can see an image online, but an image cannot completely replicate the experience of fabric, fit, colour, proportion or movement. Customers may want advice, want to compare sizes, want reassurance before spending or simply want inspiration. The physical environment can create those moments in a way that digital cannot fully reproduce.

John Lewis's store transformation reflects this shift. Its investment includes hospitality, personal styling, services and broader experiences designed to make the store more than a place to transact. Its new concepts are deliberately bringing together products and services around customer needs rather than simply presenting individual categories.

That is a much more defensible reason for a store to exist.

But this does not mean every store should survive

This is where the high-street debate often becomes confused. Saying that physical retail remains important does not mean retailers should keep every store they have. In fact, the opposite may be true. The future could involve fewer stores, but better stores.

M&S is moving towards a more focused full-line estate. John Lewis is actively managing its store portfolio around productivity and location. Next continues to manage its physical estate through a disciplined focus on space, productivity and returns rather than treating store numbers as an objective in themselves.

The question is therefore no longer “Are stores growing?”

It is “Does this particular store create enough customer and economic value to justify its existence?”

That is a much tougher test.

A store might generate direct sales, but it can also support online sales, Click & Collect, customer acquisition, returns, brand awareness, services, content and loyalty. It may be a fulfilment point or a place where customers experience products before purchasing elsewhere.

Equally, a store can destroy value through high occupancy costs, staffing, rates, energy and stock inefficiency. The economics therefore have to be considered across the entire customer relationship rather than simply through sales made at the till. That is one of the biggest changes coming to physical retail: the store increasingly needs to be judged as part of an ecosystem rather than as an isolated P&L.

The high street itself is changing

There is another reason why declaring the high street “dead” is too simplistic.

The high street is not one thing. Oxford Street is not the same as a regional city centre. A retail park is not the same as a traditional high street. A shopping centre is not the same as a neighbourhood location. A flagship is not the same as a local convenience store. And the customer mission is different in each.

A flagship may be about brand theatre and discovery. A regional store may be about convenience and service. A retail park may be about accessibility, parking and larger-format shopping. A neighbourhood store may be about frequency and immediacy.

The mistake is therefore treating physical retail as a single channel.

It is a collection of different customer missions.

The retailers that win will be those that understand which mission they are trying to serve, and build the store around it.

Fashion has an opportunity that many retailers haven't fully exploited

For fashion, this becomes particularly interesting because the store can become the place where the brand becomes tangible.

A customer can see a collection rather than simply scroll through it. They can experience styling, discover products they were not actively searching for, receive advice, attend an event, create content, meet other customers, collect an order or return something. The store can therefore become a brand platform. And that is increasingly extending into media.

John Lewis has invested in content creation within its physical environment, including The Box Studio at its Oxford Street store, designed to produce social and video content throughout the year. That is significant because it changes the role of the store again. The store is no longer just a place where the customer consumes the brand.

It can become a place where the brand creates content, community and discovery.

That is a fundamentally different commercial proposition from the traditional shop.

So is the high street actually dead?

No. But the undifferentiated store is in trouble.

The model based on simply putting a shop in a good location, filling it with product and waiting for customers to arrive is becoming increasingly difficult to sustain.

The future belongs to physical retail that earns the visit. That means better product, better experience, better service, better convenience and better integration with digital. It means giving the customer a reason to leave the house when they could complete the transaction from their sofa.

The strongest retailers are already moving in this direction. M&S is reducing and renewing its estate around higher-productivity locations. Primark continues to invest in stores while connecting them to digital services. John Lewis is investing heavily in stores, hospitality, fashion and experiences. Next is managing physical retail through a disciplined productivity lens. These are not identical strategies, but they point towards the same conclusion.

Physical retail still has a role. The role is changing.

The bigger question isn't “store or online”

For years, the retail debate has been framed as a battle between physical and digital. That framing is increasingly obsolete. The customer does not necessarily think in channels. They think in missions. They want to discover something. Find something. Compare something. Try something. Buy something. Collect something. Return something. Get advice. Be inspired. And they increasingly expect the retailer to make all of those interactions feel connected. The best retailers therefore will not necessarily be those with the most stores or the biggest websites. They will be those that understand what each part of their ecosystem is supposed to do, and how those parts work together.

The TFTT Conclusion

The high street isn't dead. But the old model is.

The next phase of physical retail will be less about the number of doors a retailer operates and more about the value each door creates. Some stores will close. Some will become smaller. Some will relocate. Some will become flagships. Some will become fulfilment and service hubs. Others will become destinations that combine shopping with hospitality, expertise, entertainment and community. That is not the death of physical retail.

It is the reinvention of it.

The most important question for fashion businesses is therefore no longer:

“Do we need stores?”

It is:

“What does the customer need our stores to do?”

If the answer is simply “sell products”, the store is increasingly vulnerable. If the answer is discover, inspire, advise, experience, fulfil, connect and sell, the store can become one of the most valuable assets a fashion business owns.

INSIDERS Perspective

The high street doesn't need to return to the past.

It needs to become more relevant to the future.

The opportunity is not to defend every store. It is to build the right physical experience, in the right place, for the right customer, and make it work seamlessly with everything that happens before and after the visit.

THE FASHION THINK TANK

INSIDE FASHION. NOT OBSERVING IT.