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Recent reports that UK retail space is shrinking should not be read simply as a story of high street decline. I think they should be seen as a chance to redesign town and city centres around people, communities and long-term local growth.
Recent analysis by CoStar reported that UK retail inventory has shrunk for the first time this century, with The Times also reporting that the UK lost a net 800,000 sq ft of retail space in 2025, followed by a further 700,000 sq ft in early 2026.
As Service Director for Economic Growth and Skills at Wakefield Council and iED Board Member, I see this trend through the lens of Good Growth. The iED’s 2026 Delivering Good Growth report, ( the final version of which will be launched at our conference in November) argues that growth must be shaped by strong local leadership, practical action and genuine partnership working, with a focus on what growth delivers for communities rather than economic output alone.
Shrinking retail space should be understood as part of a wider and irreversible change in how town and city centres are used. This is not urban decline. It is urban transformation.
Changes in shopping habits are not temporary, and our places and spaces need to reflect that. Consolidation of retail should be welcomed where it gives town and city centres the chance to become more useful, more resilient and more relevant to modern life.
Traditional retail will always have a role, but it can no longer be expected to animate places on its own. The strongest urban centres of the future will be those that give people many reasons to visit, live, work, study, spend time and connect throughout the morning, afternoon and evening.
That means making better use of former retail space for leisure, homes, commercial premises, workplaces, public services, culture, green space and high-quality public realm.
Done well, this kind of regeneration can drive footfall in a way retail alone no longer can. It can support thriving local businesses, create local employment, bring disposable income back into town centres, provide homes close to transport hubs and reduce the need for people to travel elsewhere.
That is exactly where the Good Growth agenda matters. This is not about replacing shops with buildings for the sake of it. It is about creating places that work better for people, businesses and communities.
Town centre regeneration is increasingly about creating more self-contained local economies, where people can live, work and spend time in the same urban centres without always needing to travel elsewhere.
For me, Good Growth in practice means finding the right balance between quality housing, decent employment, higher-skilled jobs and attractive, safe, green public spaces.
It means creating places that can support young professionals, students, families, workers, businesses and visitors. It also means strengthening local labour markets, so people have more opportunity close to home.
Town centres should not simply be measured by how many shops they have. They should be judged by whether they support local enterprise, improve quality of life, create opportunity, build confidence and give people a genuine stake in the future of their place.
Across West Yorkshire, major mixed-use regeneration schemes show how places are already rethinking the role of urban centres.
Wakefield’s Cathedral Quarter plans include more than 1,000 new homes, improved connectivity, retail consolidation, new leisure opportunities, civic space, open space and new cultural facilities.
Other examples include South Bank Leeds, the Huddersfield Blueprint and Bradford City Village, all of which reflect a wider move towards urban centres with a broader mix of homes, employment, leisure, culture, public realm and community uses.
The Cathedral Quarter in Wakefield is a strong example of the kind of urban transformation we need to see more of. It brings together new homes, connectivity, leisure, culture, open space and a more ambitious future role for the city centre.
Wakefield has real cultural strengths through assets such as The Hepworth Wakefield and Yorkshire Sculpture Park. Good Growth means understanding those individual strengths and building regeneration around what makes each place distinctive.
The answer will not be the same everywhere. What works in Wakefield will not be identical to what works in Leeds, Huddersfield, Bradford, a coastal town or a post-industrial community. That is why local leadership, local knowledge and local ambition matter so much.
If we get this right, shrinking retail space does not have to mean shrinking ambition. It can be the start of stronger, more useful and more successful town and city centres.
This is about creating places that are busy in the morning, afternoon, evening and night. Places with homes, jobs, culture, green space, leisure, learning, business and community life.
That is what Good Growth should look like. Not managing decline but shaping urban centres that are fit for the future.
Clare Elliott is Service Director for Economic Growth and Skills at Wakefield Council and an iED board member.
Would you like to write for the iED? As part of iED individual and organisation membership, ALL members have the opportunity to publish articles on our website. We are now seeking ideas for contributions from members, including those in our Early Career Network. These can be around any aspect of economic development, insights on work you are undertaking and project successes you would like to share, or any viewpoint you would like to express. If you have an article proposal please contact: Jac Jordan, Institute of Economic Development PR consultant, Tel: 01706 214 340/ 07887 416 182, email: jac@vivapr.co.uk
