Retail isn’t dying, it’s detoxing and heritage developments show us what’s next

We read and hear the headlines that retail is dying, but what’s actually happening is something a bit more thoughtful, relevant, and aligned with how people actually live.

Out go the oversized chains, the over-leveraged giants, the shops that never quite adapted. In their place, something more attuned to how we live our lives – and want to live our lives – is growing.

There is a clear signal that economic recovery is on its way, particularly as retail and food and beverage insolvencies fell by 9.8% in the 12 months to May 2025 compared to the previous 12 months. However, this is more than just a recovery story, it’s actually about a reset and a sign that the market is clearing out the noise and starting again with more stable foundations.

You can see it happening in corners of the city that feel more human and authentic – essentially addressing what consumers are demanding. Bloomsbury’s Sicilian Avenue, just a few metres away from the busy Holborn station, is a good example. It’s a beautiful pedestrianised stretch tucked between Holborn station and The British Museum. With no traffic, no pressure, and no glassy monoliths, this is a Grade II listed street reimagined as a calm, curated place to eat, work, connect and relax away from the bustle.

The numbers speak volumes. Research commissioned by Tristan Capital Partners reveals that almost two-fifths of people visiting London do so for dining experiences, and 63% of people say they prefer doing so on pedestrianised streets. Among 25–34-year-olds, that jumps to 64%. It’s not about convenience anymore. It’s about quality. Atmosphere. A slower pace. And over half of people now say they seek more high quality social and dining experiences in the capital than they did before 2019.

The retail connection

It’s not just tourists. London’s business community is right there too. Nearly one in five people working for small businesses use cafés and restaurants as their workspace. More than half of business owners say they’re drawn to better quality venues. For some, a coffee shop has replaced the corner office. For others, it’s where ideas are sparked over lunch. Either way, the lines have blurred. Work, food, community, leisure, all overlap. Almost a fifth (19%) of those working for small businesses with fewer than 10 employees choose central London-based cafés/restaurants to work in, and more than one in 10 (11%) of business owners work from restaurants and cafés when in Central London for business.

Retail has stopped trying to be everything to everyone. That scramble for scale, for sameness, for saturation is very much over. What’s growing now is retail that fits with what people want. And what they increasingly want are purposeful places which stand for something – with a point of view and a pulse.

According to Knight Frank’s research, retail has been through something of a reckoning. After years of decline, the sector has started to show resilience. Rental markets are rising (retail rentals rose by 2.3% in H1 2025 across all sub-sectors) and vacancy rates are steadily falling in most markets, sitting at 13.7% as of H1 2025. Retailers are more focused, less exposed, and in a better place to ride out bumps. The future isn’t just about being hyper focused on survival, but about being strategic with smarter use of space in more relevant formats, and a recognition that people don’t just shop, they experience.

This is what makes Sicilian Avenue feel like a marker. It’s not vast at just a few hundred metres long, but it makes sense. Although it sits in a high-footfall area, it doesn’t lean on volume instead focusing on ‘feeling’. The calm over the chaos and  character over chains. It offers something different in a city saturated with homogeneity.

Pedestrianisation plays a big part in that, allowing for less bustle and more relaxation. According to Tristan Capital Partner’s research, more than half of people say streets without traffic feel more serene and more pleasant. Among Baby Boomers, nearly three-quarters agree, suggesting they’re willing to travel to these spots. Whilst safety matters too, this is just as much about mood because when people feel calm, they stay longer. And when they stay longer, they spend.

Retail investment is shifting accordingly. Prime yields on high street properties have strengthened and the best spaces are seeing competitive bidding. Total retail investment volumes in the first half of 2025 were solid at £2.51bn. Not explosive, but steady. And that’s the point. The market isn’t bouncing back to old behaviours. It’s moving forward in a different way.

Sicilian Avenue is part of that story. Not a big bang, but a careful reintroduction. A heritage space revived again and there’s something grounding about that. Something hopeful. Especially at a time when so much of the built environment feels either empty or underwhelming.

Consumer spending on leisure and recreation is also up by 4.3%, even with inflation and pressure on pockets. What we’re noticing is that people are choosing carefully where and how they socialise – whether that’s meeting friends, work  mates or simply enjoying themselves. The premise seems to have shifted as it’s no longer about scale or spectacle, with consumers selecting high quality experiences.

Retail is far from over. It’s evolving and it’s not about being louder, but wider. If places like Sicilian Avenue are anything to go by, it’s learning how to fit better into our lives, with streets that feel like they belong.