After years of uncertainty and closures, the UK’s high streets are showing strong signs of recovery. New analysis from Funding Circle, the UK’s leading SME finance platform, reveals where the high street is thriving—and the industries driving the turnaround.
Once considered under threat from the rise of e-commerce, the high street is now reinventing itself as a hub for experience, community, and lifestyle. With the likes of fashion favourites such as Topshop announcing their return to the high street and Crew Clothing opening 20 new stores in 2025. The future looks bright for UK high streets. Cities that have embraced this transformation—by blending food, leisure, wellness, and premium retail—are leading the way in 2025.
Consumer spending shifts: food, leisure, and lifestyle take centre stage
While the UK economy still has a long way to go when it comes to recovery, there are signs that consumers are spending more and differently in 2025. Deloitte’s consumer confidence tracker shows that while essential spending has dropped in Q2, with everyday purchases declining by 4.6 percentage points, discretionary spending like clothing, restaurants, and holidays saw a slight rebound (+1.5 ppt).
Deloitte’s consumer tracker shows discretionary spending is rebounding, with strong growth in:
- Clothing & footwear (+6.6%)
- Holidays & hotels (+4.7%)
- Eating out & restaurants (+2.8%)
Meanwhile, leisure spending surged in Q2, particularly in:
- Eating out (+9.3pp)
- Drinking in pubs & bars (+9.2pp)
- Long holidays (+5.5pp)
This growing appetite for lifestyle and leisure experiences is transforming high streets across the UK.
The winners: Cities reinventing their high streets
City centres may occupy just 0.1% of the UK’s land, but they account for a staggering 9.1% of all face-to-face consumer spending. Yet this power is not distributed equally. High street success is increasingly defined by location, local income, visitor appeal, and a high-quality leisure mix.
High streets with strong economies, diverse retail mixes, and cultural appeal are thriving. Cities leading the revival include:
- London – The strongest all-round recovery, with just 7.4% vacancy. Food & drink, premium retail, and wellness services dominate.
- Manchester – Over 25% of spend goes to food & drink. Indie retail and Gen Z-driven wellness trends fuel growth.
- York – Tourism is key, with visitors outspending residents (40% of all spend). Independent boutiques and diverse dining lead the charge.
- Edinburgh – A strong balance of culture, tourism, and retail has kept vacancy low (9.3%).
- Leeds – Premium retail booms, with £1 in every £3 spent at high-end stores.
Cities like London, Edinburgh, York, and Cambridge now lead the way, with 1 in 10 shops vacant or fewer, thanks to ongoing tourism, thriving professional economies, and a strong mix of high-end and independent retailers.
| Rank | City | Vacancy Rate (%) |
| 62 | London | 7.4 |
| 61 | Cambridge | 8.5 |
| 60 | Oxford | 9 |
| 58 | Brighton | 9.2 |
| 59 | York | 9.2 |
| 57 | Edinburgh | 9.3 |
| 56 | Liverpool | 9.5 |
| 55 | Southampton | 10 |
| 54 | Milton Keynes | 10.2 |
| 53 | Peterborough | 10.3 |
Compare that with cities like Newport, Bradford, and Blackpool, where nearly 1 in 5 shops sit empty, and the picture becomes more stark.
| Rank | City | Vacancy Rate (%) |
| 1 | Newport | 19 |
| 2 | Bradford | 18 |
| 3 | Blackpool | 17.6 |
| 4 | Basildon | 17.4 |
| 5 | Sunderland | 16.8 |
| 6 | Birkenhead | 16.3 |
| 7 | Stoke | 16.3 |
| 8 | Wigan | 16.3 |
| 9 | Swansea | 15.4 |
| 10 | Southend | 15.4 |
The industries thriving on the high street
- Food & drink: The most resilient sector nationwide, from multicultural cuisines in London to indie coffee shops in Sheffield.
- Wellness & beauty: Popular in younger-skewed cities such as Manchester, Newcastle, and Brighton, from boutique gyms to nail bars.
- Premium retail: Concentrated in high-income areas like Leeds, London, and Oxford.
- Tourism & culture: Cities like York and Edinburgh benefit from strong visitor economies that fuel independent shops, food, and cultural attractions.
Looking ahead: what makes a high street work in 2025?
The high street is changing and for the better. For business owners ready to launch, the opportunity is real, but success depends on three key ingredients: location, timing, and understanding consumer behaviour.
In 2024 alone, Funding Circle helped support over 87,500 UK jobs and contributed more than £2 billion in tax revenue through the small businesses it financed. With demand growing for independent shops, experience-led services, and community-first concepts, now is the time to get started.
Here are four practical tips for setting up a successful small business in 2025:
Follow the footfall, but read the local room:
Cities like York, Cambridge, Edinburgh, and Brighton are thriving thanks to strong footfall, diverse spending, and cultural appeal. These places offer great opportunities for food-led independents, homeware boutiques, and community-first small businesses.
Go where small businesses are welcome:
High streets in Bristol, Manchester, and Leeds are shifting toward independent, experience-led retail; think local breweries, cantina-style eateries, vintage interiors, and wellness studios. These areas benefit from Gen Z and Millennial demographics who prioritise community, sustainability, and uniqueness.
Small towns, big potential:
As consumers turn away from retail parks and shopping centres, smaller market towns with rising incomes and lifestyle appeal are gaining traction. Think boutique bakeries in market towns, local coffee roasters in commuter areas, and pop-up spaces in coastal cities.
Spot the sector trends:
If you’re in food, wellness, homeware, or premium casual retail, you’re aligned with the strongest growth areas. But don’t overlook cultural and hybrid spaces—bookshops with wine bars, salons with social lounges, or gyms that double as event venues.
From boutique bakeries in York to nail bars in Manchester, the UK high street is not dead—it’s just changing. Cities that invest in place-making, experiential retail, and income-driven regeneration will win. Those clinging to an outdated retail-first model may struggle to keep the shutters up. As the UK high street evolves into a space shaped by experience, community, and creativity, there’s real opportunity for entrepreneurs to play a role in its revival. Whether it’s opening a bakery in a bustling market town, launching a wellness studio in a growing city centre, or bringing a fresh food concept to a newly regenerated district, the demand is there, and so is the support.
