The plight of the high street has been shorthand for decades of decline in traditional retail, but one sector has endured. Station retailers have been on a first-class ticket of rising footfall and discretionary spend, right until the pandemic derailed their express. Shunted off to the scrap yard or a high-speed recovery? Simon Walton investigates

No so long ago, although it seems like a different age, the throng bustling down this balustraded boulevard made getting from upmarket convenience store to trackside cafe something of an ordeal. Being bundled off your feet and crushed beneath the wheels of a thousand roller-suitcases was a clear and present danger. Not now. The crowds that made Britain’s railway network busier than ever, and turned rail retailers into cash generators for shopkeepers, landlords and station managers alike melted in the blistering heat of the worldwide pandemic.

‘We used to go to that coffee shop’ says Aileen, who works in the city centre and used to come here to meet friends, catch up and watch the world go by. That’s all changed now. ‘Often, whoever arrived first would have to grab a seat and hope we could get a table together before long. Now look. There are half as many seats and half of them are empty. Half my friends work at home now, and I only come in a few days a week. We don’t go around the shops any more, and this place, the station, I’d say it’s like a library, except the libraries are closed too.’

Aileen’s not her real name, but the plight of her very-real station rendezvous and the retailers around it, on the marbled concourses and glass galleries of Britain’s major stations, is all too apparent. A virus-induced, government-mandated catastrophic collapse in travel-related footfall has shattered retail business in every station setting.

‘Railway stations have been a uniquely attractive proposition for retailers’ says Clare Bailey, better known as TV’s Retail Champion and who has been looking at the special circumstances surrounding rail retailers.

‘Shop managers are staring out over the tills and wondering where all the customers have gone, but that’s just the obvious part of the problem’ she says.

‘Lack of footfall means an obvious drop in takings, and for some retailers that drop has been absolute – down to zero. That however doesn’t mean overheads have reduced in the slightest. Furlough and business rates relief make a difference in the short term, but without recovering lost business, cost cutting support is like building a railway with the train already coming down the tracks. It’s all going to catch up with reality very soon.’

The British Retail Consortium, the influential trade association, has already raised their argument with Westminster. In September they claimed a victory for their lobby, when Rail Minister Chris Heaton-Harris took their message to the Train Operating Companies, asking them, as the BRC puts it, ‘to be flexible in reaching new rental arrangements with their tenants.’ Of course, under the emergency measures which have effectively annulled the franchises under which most TOCs operate, Heaton-Harris and the Department for Transport was able to ask a favour rather more robustly than would have been possible just six months ago.

‘There’s no doubt the continued decline in footfall will have had major impact on retailers’ says Peter O’Connell, a commercial development director, with extensive experience in the rail sector. ‘Most lease and licence agreements are based on a relatively modest fee topped up by a share of turnover, so to some extent that impact is mitigated. But that’s not likely to be sustainable in the long term.’

Action of that nature had already been taken by the infrastructure agency, Network Rail, who manage a score of Britain’s biggest stations, including the one Aileen frequents – albeit rather less frequently these days. Network Rail acted quickly to support the retailers within its portfolio when they broke ranks and said they would waive rental for the first quarter of the financial year for their one hundred or so retail tenants. ‘We work in partnership with retailers and tenants to provide positive experiences for passengers and communities’ said David Biggs, the Managing Director for Property at Network Rail. ‘In challenging times, it is important we step up to the plate and show our partners they are valued, and we are ready and willing to help. That is why we have taken this decisive action.’

None of the retailers offered relief have turned it down, but Retail Champion Clare Bailey says cost-cutting gestures, while welcome in the short term, will not solve the challenges facing rail retailers. ‘The real problem is for the leaseholder. If that’s the shop keeper, their troubles are already apparent, but typically the leaseholder is a national chain with tough decisions to make. With retail in free-fall in all settings, be that station, street or centre, they are clearly going to look at reducing their outgoings by as much and as quickly as possible. That means looking at the least profitable outlets and those with the leases that can be cleared. Right now, railway units are doing radically reduced business, and their would-be customers are being told to linger as little as possible. Effectively, government advice says avoid station stores, and that’s a real uncertainty for the future. Business hates uncertainty, and as those leases come up for renewal, business will vote with its head not its heart. If it’s more cost effective to close than to stay open, that’s what they’ll do. What can be done as short-term measure cannot be done in long term. If there is no footfall, then managers will make the call between the Oxford Streets and the Waterloos, and cut every loss-maker, which, right now, is most likely in the station.’

The railway has for two decades now been proud of ever bigger passengers numbers. That footfall has been great news for operators, and has encouraged a raft of station redevelopments. Some have been modest, others have been epic. Reading, Leeds, London Bridge and Kings Cross all readily come to mind. Small or big, there has been a unifying theme in all these projects – an ever more zealous desire to cope with that growing demand. The faster passengers can be processed through the concourse, the greater numbers can be handled. The brusque nature of crowd flow dynamics is however not such great news for retailers.

‘The trend for stations to become destinations in their own right has been put to the test most severely in the pandemic’ says Nick Bethune, conservation architect and director at West Scott Architects in London. ‘Traditional station architecture typically evokes visions of grandeur, fine craftsmanship and a strong sense of place. They were designed to impress in an age when railways were the primary means of transportation and the Victorian railway companies battled for prestige. This rich heritage has underpinned many regeneration projects in recent decades, with stations once again seen as important public spaces’ he says.

Nick Bethune looks at the traditional disposition of retail space on concourses, often kiosks within circulation areas, and says that it tended to be more limited than the breadth of retail and catering on offer today. ‘For reasons of operational flow and aesthetics, the apparent clutter of news kiosks and tobacconists in the middle of concourses was often swept away in modernisation projects from the 1960s onwards. Retail was relegated to the walls or elevated to new-build galleries overhead, but at the same time expanded reflecting wider trends in consumer demand. Historic station settings have proven remarkably adaptable, but their current level of retail provision is only sustainable with high footfall. Modern station redevelopments have attempted to make retail more a central part of the station experience. In some cases, like Birmingham’s New Street, retail seems almost the purpose of the station. Rail travel is the convenient adjunct. But whether modern or historic, station retail remains dependent on the travel market, despite laudable efforts to attract other custom.’

Retail as a theme appeals to Clare Bailey and Peter O’Connell. From a retailer’s point of view, Bailey says it is a commercial balancing act. ‘Experienced station retailers will need convincing, and that will require hard facts and dedicated monitoring. While operational stats reflect travel related footfall, retailers will demand dwell time and unit visit stats too. Retail works in real-time, just as much as the railway does’ she says. O’Connell agrees and says so much depends on the future industry structure.

‘It’s hard to predict, but how the commercialisation of stations, with the associated customer experience benefits, is maximised is important. It might be it doesn’t fit a concession model. Maybe station space management should be outsourced to retail specialists to allow that focus on operations.’

Even so, while government advice is to stay away from transport, and that clearly dissuades visits to stations for any reason, there will be no recovery for station retailers, and the concept of a destination station will be exposed as falsehood, argues Clare Bailey. ‘Unless the retail offer is exceptional – bespoke boutique and champagne bar – then there is no reason to visit the showpiece stations. If your local station has nothing to offer, other than a commuter train you no longer use, then there’s no recovery for the station cafe, unless that cafe makes itself something special. Station retailers, with the cooperation of station managers, have it within their power to turn around the situation, but it will take an effort like they’ve never had to make before.’

Network Rail is alive to the challenges faced, as the managing director for property David Briggs, alluded to in his reply to the BRC. With a bigger portfolio than any of the TOCs, the infrastructure agency stands to lose more revenue than most. ‘We also understand more support may be required as this situation develops’ says Briggs. ‘We will continue to liaise with central Government and will keep speaking with our retailers and tenants about how we can assist further.’

Clare Bailey is concerned that, if businesses choose to depart the station concourse, there will be a surfeit of property available, which will further detract from the appeal of the railway. She says a better and a diverse offer is a viable long-term solution. Alternatives like taking retail in-house are not necessarily a good idea. Peter O’Connell agrees. ‘The challenge with an in-house model is still making it profitable, and generally train operators are not that good at it. There are some examples in the Netherlands for example that are better, but even there the direction seems to be more to focus on core rail operations and move more to outsourcing.’

Both Bailey and O’Connell think spreading the net beyond retail could be coming down the line. Stations as a true hub for flexible office space is a possibility. then again, most London estate agents will point to their premises on the Underground as proof positive of that model. Stations that are fit for the new purpose as a community heart is the new normal, utilising joint funding approaches for commercial development and other key social priorities, whilst improving links with existing city and town centres. Somewhere that the community is comfortable to visit, and use, regardless of their travel habits. Maybe somewhere Aileen and her friends will eventually come back to, catch up, and watch the world go by once again.

Simon Walton is Chair of the Campaign for Borders Rail