NS Profile - The high street

For the past ten or 15 years, British high streets have had a comfortingly familiar air. If I was dropped on any one of them with a shopping list, I think I could find just what I wanted with minimal effort: Dixons for a plasma-screen Palm Pilot with DVD player and egg-whisk attachments; Boots for anti-dandruff cream and a Dame Edna pair of specs; Marks & Spencer for a microwaveable Kurdish biryani and a pair of golfing socks. But this is all changing. A rash of poor Christmas trading results from the likes of W H Smith, Marks & Spencer and Woolworths has shown that British shoppers are becoming fickle, deserting their old friends in droves, and has even cast doubt on the survival of the high street.

In the 1980s and 1990s, supermarkets gobbled up most of the butchers, bakers and grocers in British towns. Now that out-of-town superstores are selling everything from televisions to toothpaste, using their fearsome purchasing power to drive down prices, the bigger high street retailers are in trouble, too. Boots has just announced 900 job losses, Marks & Spencer's Christmas sales were down 2.5 per cent on the same period last year and Dixons is growing slowly, if at all. "What seems to be happening," according to Tom Stevenson, an analyst at Hemscott, "is that Britain's mature retail scene is becoming a zero-sum game. Some players do well, but only at the expense of weaker rivals."

For observers watching the spread of Wal-Mart in the United States (affectionately known by retailers there as the Black Death), this is familiar stuff. The Wal-Mart formula, which involves drawing food-shoppers to gargantuan warehouses on the edge of town with acres of free parking, then sneaking up on them at the checkout and selling them things that aren't food at all, has already crossed the Atlantic, albeit in a less stark form. Out-of-town superstores, with their unlovely architecture, now encircle many British towns. Tesco has led the way in non-food sales and now attracts more than 10 per cent of all spending in the UK, but Asda (part of the Black Death group) is not far behind and has managed to become the country's fifth largest clothing retailer.

Central London and other cities are largely immune to this phenomenon, because it would take about three hours to drive to an out-of-town store, thus removing the convenience factor, and also because affluent Londoners like supporting small delicatessens and think it reasonable to spend £10 on a thimble-sized pot of sun-blanched aubergine paste. But in smaller towns, the changes wrought by out-of-town shopping are already apparent. I went to Horsham, an affluent town in the south-east with a population of 120,000, to take a biopsy of the British high street.

Horsham is representative of wider trends for several reasons. A former market town, it has seen all the fads that have gripped British retailing come and go. There is a long high street and a covered shopping mall. Most of the struggling big retailers are there, and there are also lots of little shops that don't have anyone in them. All the supermarkets (apart from Waitrose, which has a different pitch) have packed up, moved out of town and become superstores. Horsham is also "greyer" than the average British town and so is a good guide to the direction the high street might take in order to persuade an ageing population to part with its cash.

William Cobbett came here on one of his rural rides, on a Thursday at the end of July in 1823, and his description of the place still more or less stands (apart from the final bit): "This is a very nice, solid, country town. Very clean, as all the towns in Sussex are. The people very clean. The Sussex women are very nice in their dress and in their houses. The men and the boys wear smock-frocks more than they do in some counties."

Walking down the high street, it soon becomes clear who the winners and losers are. There are lots of charity shops (seven) and estate agents (13), several Italian restaurants that are not run by Italians and a couple of hairdressers. There are also more small jewellery stores than I would have thought possible. In other words, all things that cannot be bought (not yet, anyway) at the out-of-town stores. This mushrooming of small niche stores and outlets for Britain's mighty service economy is just what the high street needs if it is going to survive, according to the Urban and Economic Development Group (Urbed).

For the rest of the shops on the high street, the future looks bad. Britain already has the highest amount of retail space per person of any European country, and as the internet and superstores take an ever-increasing proportion of sales, there are just too many shops and not enough credit cards. Things get worse once inside Horsham's Swan Walk, the shopping mall that was clearly once the prestigious place for big shops to be. Boots has a vast two-storey store, but only two of the six checkouts are staffed. When the announced job cuts are made, customers will probably have to ring their foot-spas through the till themselves. There is nobody in Dixons, and W H Smith looks forlorn. Marks & Spencer has good clothes and food, but looks ten years past its best-before date. In OurPrice, which is having a closing-down sale, the man behind the checkout looks as if he's dying of ennui, waiting for someone to buy something.

One new store, Ann Summers, purveyors of uncomfortable-looking lingerie to Cobbett's nice women, seems to be doing a little better. Towards the back of the store, away from the gaze of the pensioners sitting on a bench outside, there is a range of goods not normally associated with the British high street, from "pleasure gel" to a display of "top ten vibrators" (to make up for the inadequacies of Horsham's smock-wearing men?). Although the market for this sort of thing is probably limited, Ann Summers is the kind of small boutique with a well-defined role that will probably survive on the high street. A shop assistant assures me that the store was "mad over Christmas".

So what will our high streets look like when the out-of-townification of retailing is complete? Nicholas Falk of Urbed says Britain may follow the American model, with the centre of towns being boarded-up and all the shopping done by car in superstores. "The town centres," he says, "will be full of people with time but no money, and the suburbs with people who have money but no time."

The centre of Horsham would become a depressing place, with virtually no economic activity apart from the occasional mugging of one of its predominantly Conservative voters.

If this is to be avoided, local government will have to cut rates and rents for retailers on the high street and possibly charge the superstores a little more. Andrew Simms, author of a report on the death of the high street for the New Economics Foundation, argues that locally owned businesses should be given preferential rates, to stop money leaking out of the local economy. High street shops will also have to adapt their opening hours to suit the people with money but no time; Boots recently announced that it will be opening later and other shops will follow. And paradoxically, encouraging the superstores to come into the town centre would be beneficial, as people are more likely to visit a small shop if they can get everything else they need near by.

The best chance of salvation for the high street is probably to diversify into what urbanists call the "leisure and night-time economy", rather than to duplicate what is already being sold in the superstores. Urbed points to successes in York and Wolverhampton, where dying town centres have been revamped with the help of bars and cinema multiplexes. Towns also need to be made more pleasant and easier to get around. The introduction of trams to Nottingham is the sort of project that far-sighted town councils could copy. Horsham's town council has made a big effort to make the centre more attractive by improving the street furniture and putting up a monument to local boy Shelley. Finally, town centres may become more residential places. Paul Davies of the Civic Trust points out that this would reverse the change which occurred at the end of the 19th century, when the inhabitants of town centres moved out to make way for shops.

British high streets may follow the US model and die off, which would be a shame - and somewhat ironic, since American town planners are now trying to figure out how to get shops back into town centres. "Retailers are always optimistic," John Clare, group chief executive of Dixons, said in a recent interview. "If you're not optimistic, don't be a retailer." But optimism on its own will not save the high street.