Planning issues - a lot of the city centre is owned by the colleges, and there are various reasons for not allowing them to revamp or expand the retail units. A lot of the buildings are listed, which makes them effectively unalterable for disability access etc. This combined with the no-cars ideal (OTS side-effects: very high parking costs, no through-route public transport, poor accessibility for elderly/disabled) is making it very hard for most businesses to thrive. The rents won't drop because "it's Oxford", and there's always another coffee or mobile phone shop willing to move in to take advantage of the student market.

The council's been struggling with this for the last 20 years to my knowledge, and it gets worse rather than better. We have finally got a supermarket in the very centre again, after 12 years - two, in fact, as Tesco and Sainsbury's are 2 doors apart in the same building! - and there was very stiff opposition to those.