The retail industry in the South East of England 2025/26

The retail landscape across the South East of England in 2025/26 reflects a mix of cautious recovery, structural challenges and occasionally pockets of opportunity including local developments such as the ongoing Heathrow Airport expansion.

Locally, the retail industry has had some modest growth with retail sales in the lead up to Christmas from greater footfall in the high street. However, cost of living pressures has left consumer confidence low and as overall sales volumes remain below pre-pandemic levels.

The Government are bringing in new legislation intended to help retailers so that new commercial leases will be banned from containing “upwards only” rent reviews. However, the proposals are misguided as retail leases are often short and do not contain rent review provisions.

Business rates continue holding retailers back

It would be more helpful to address high business rates issue which continue to cripple retailers. Adjustments to business rates might provide some temporary relief to high street (up to 31st March 2026 when the Retail Hospitality and Leisure Relief comes to an end) but retail premises will be revalued with effect from 1st April 2026 based on rental costs on 1st April 2024 - will we be in a better position? Commentary following the announcement has been mixed.

Retail growth in Hounslow from ties to Heathrow

Some areas will however thrive due to local retail dynamics. Hounslow continues to secure good retail footfall with the help of major shopping centres and high street stores integrated with transport and business hubs tied to Heathrow.

Heathrow Airport is at the heart of the South East’s economy and will be a crucial driver of the regions retail capabilities.

There has been government support for a third runway and multi-billion-pound investment in facilities and infrastructure. The planned expansion has implications for retail businesses both inside the airport and in surrounding communities – (notwithstanding some local opposition) and the employment market.

Airport will benefit retail, hospitality and construction

The increased numbers of passengers will be a huge kicker for airport retail and hospitality but also local suppliers and retailers will benefit through increased procurement. Other industries, especially construction, will benefit especially if plans to put a section of the M25 underground proceeds.

The purchase of the Delta Hotels by Marriott Heathrow Windsor in Slough by Gold Care Homes at the end of 2025 in a multimillion-pound deal, financed by OakNorth with a £18.2m loan is as a result of Delta Hotels scale, brand and location and will have a ripple effect on the local economy.

It shows confidence by investors and lenders as stated by OakNorth, with Heathrow’s passenger volumes forecast to exceed previous records in 2025, demand for quality accommodation and associated retail experiences remains robust, underscoring how travel infrastructure upgrades can reinforce surrounding commercial ecosystems.

Tough times on the high street

Forecasts indicate that we may have seen over 17,000 store shutdowns in 2025.

Heading into 2026, we are already seeing confirmed or expected closures of stores, with River Island, Poundland, Cancer Research UK, Trespass and House of Fraser all struggling with economic pressures. Regrettably there will be many high street shops and shopping centres who will continue to struggle with high costs, changing consumer habits and difficulties in recruiting staff.

Investment and revitalisation in 2026

The location and investment in Heathrow infrastructure will be a huge economic catalyst for the region, generating jobs, visitor spending, and supply chain opportunities that will assist the airport and the surrounding area.

The government has announced that local communities will be handed new powers to revitalise high streets in their new ‘Pride in Place Programme’. A chance to revitalise neglected high streets and create new spaces to breath life into communities in the region. With powers such as Community Right to Buy, Compulsory Purchase Powers, Power to block unwanted shops and giving residents and community groups more say on their community.