Remember when every other week brought news of another big chain going bust? Empty units, steel shutters, “closing down” signs that never seemed to come down. I used to walk through my local town centre and feel genuinely depressed about it. Yet lately, something feels different. The shutters are coming up again. There are queues outside certain shops on Saturday mornings. People are lingering, taking photos, actually enjoying being there.
It turns out the high street isn’t dying after all. It’s mutating.
The Death of Shopping Was Greatly Exaggerated
For years we were told the future was purely online. Amazon would kill everything. Physical retail was a dinosaur. Then something curious happened. People got bored. Scrolling endlessly lost its shine. Gen Z, the generation that grew up with smartphones glued to their hands, started showing up in actual shops more often than their parents do.
Turns out humans still crave real-life experiences. We want to touch fabrics, try fragrances, laugh with friends over terrible bowling shoes, drink overpriced coffee while people-watching. The winners now aren’t the ones with the cheapest prices – they’re the ones creating reasons to leave the house.
What the Smart Money Is Noticing
Rental values for prime high-street space rose more than 2% in the first half of 2025. Vacancy rates fell. Investors who wrote off retail property five years ago are quietly buying again. The shift isn’t uniform – some towns will keep struggling – but the best locations are seeing genuine bidding wars.
More importantly, a new blueprint is emerging. Successful operators aren’t trying to compete with Amazon on price or selection. They’re competing on emotion, community, and things a screen simply can’t deliver.
From Transaction to Destination
Think about the stores you actually bother visiting these days. For many of us, it’s not just to buy something specific. It’s the whole ritual. The new model blends shopping with leisure, culture, even theatre. Luxury brands have been doing this for years – turning flagships into art galleries or architectural statements – but now mid-market players are catching on.
The retailers that will thrive are reimagining their spaces as cultural and community hubs, not just transactional zones.
Pop-up events, in-store exhibitions, live music, workshops, food halls – anything that makes a shop worth a detour. Some forward-thinking department stores now host evening theatre performances after closing. Others collaborate with artists or run mini-museums. The line between retail and entertainment is blurring fast.
The Omnichannel Champions
One British retailer stands out as the master of this transition. They started life as a catalogue business decades ago, built an unmatched logistics network, kept their stores open as collection points, and quietly turned themselves into one of the strongest online players in the country while everyone else panicked.
Today they host third-party brands on their website, run slick click-and-collect operations, and still manage to make their physical stores feel relevant. Their shares have compounded beautifully for patient investors. The lesson? Great retail isn’t about choosing between bricks and clicks. It’s about making both work together seamlessly.
The Bargain Boozer That Refuses to Die
Then there’s the pub chain everyone loves to mock for its carpets and cheap pints. Same menu in every venue, same slightly dated decor, same reliably low prices. While craft beer bars come and go, this operator keeps packing them in. They reported record sales last year and are expanding into Europe for the first time.
In an age of Instagram-perfect interiors, there’s something comforting about consistency. People know exactly what they’re getting – no nasty surprises, just a guaranteed cheap night out. Sometimes the “boring” business model is the most defensive one.
Experiential Leisure – The Quiet Compounders
Bowling alleys sound like the ultimate 1990s relic, yet one listed operator is taking share from traditional pubs and restaurants. Families, corporate groups, students – everyone wants affordable activities that don’t involve staring at phones. The venues are being refurbished, food offers upgraded, and pricing held remarkably steady despite inflation.
- Low ticket prices encourage repeat visits
- High margins on food and drink once people are inside
- Strong cash generation funds new site roll-outs
- Very little online competition (you can’t bowl on Amazon)
Niche hobby retailers follow a similar playbook. The UK’s largest fishing tackle specialist, for example, combines destination stores with a fast-growing online operation. Anglers are famously obsessive – they’ll drive hours for the right gear and advice. When you serve a passionate community, economic downturns hurt less.
Why Valuations Still Look Absurd
Despite all this evidence of life, many retail and leisure stocks still trade at valuations that assume permanent decline. Single-digit price-to-earnings ratios. Double-digit free cash flow yields. Dividend yields north of 5–7% in some cases. The market seems to think consumer spending will never recover.
Yet real wages are rising again. Inflation is falling. Interest rates are peaking. National Insurance cuts are coming. Every one of those developments puts more money in consumers’ pockets. When spending power returns – and history says it always does eventually – these businesses are perfectly positioned to benefit.
Their success is not dependent on a rapid recovery in consumer confidence… but if conditions do improve, earnings will gain an additional tailwind.
– Fund manager Brendan Gulston
Where to Look – From Blue Chips to Minnows
Blue-chip route: the omnichannel giant we mentioned earlier remains the safest way to play the theme. Strong balance sheet, growing dividend, proven adaptability.
Value recovery play: certain department store turnarounds are finally showing consistent progress after years of pain. The risk is higher, but so is the potential reward if management keeps executing.
Experiential leisure: bowling operators, cinema chains with premium offerings, even escape room businesses – anything where the experience itself is the product.
Small-cap adventure: funds specializing in UK smaller companies often have 15–25% allocated to consumer discretionary names right now, at valuations that look generational.
I’ll be honest – five years ago I wouldn’t have touched retail stocks with a bargepole. Today I’m gradually adding exposure. Not because I think we’re going back to 2007 levels of mindless consumption, but because the pendulum has swung too far. The businesses that have adapted to the new reality look ridiculously cheap.
The high street isn’t coming back in its old form. Something more interesting is emerging – less about stuff, more about experiences, community, and human connection. And some very clever companies are about to profit handsomely from that shift.
Sometimes the best investments hide in plain sight, right in the places we walk past every day.
