The vacancy rate in UK town centres during July rose to its highest level in four years, according to the latest survey from the British Retail Consortium and Springboard.
The report found that empty shops accounted for 10.3% of all town centre shops in the UK during July, the highest rate since January 2015.
Meanwhile, overall customer footfall was down 1.9% year-on-year during July, the worst decline for the month in seven years. The decline was driven by a 2.7% decline across the High Street and a 3.1% drop at shopping centres, which was partially offset by 1.2% increase in out-of-town retail parks.
The BRC said the rise in empty stores was a serious concern, with Chief Executive Helen Dickinson noting: “If the government wishes to avoid seeing more empty shops in our town centres then they must act to relieve some of the pressure bearing down on the High Street. Currently, retail accounts for 5% of the economy, yet pays 10% of all business costs and 25% of all business taxes. The rising vacancy figures show this is simply not sustainable. We need an immediate freeze in rates, as well as fixing the transitional relief, which leads to corner shops in Redcar subsidising banks in central London.”
Diane Wehrle, Insights Director at Springboard, added: “Consumer demand is ever-more polarised between convenience and experience, and the stronger performance of out of town destinations where footfall rose by 1.2% in July reflects the fact that retail parks are successfully bridging the convenience-experience gap. They not only offer consumers accessible shopping environments with free parking and easy click and collect opportunities for online purchases, but many also combine this with an enhanced experience that includes coffee shops and casual dining restaurants, and some also have leisure facilities.”
Wehrle went on: “The attraction of retail parks was demonstrated clearly in the last week of the month when temperatures reached record levels. With temperatures peaking at nearly 40 degrees on the Wednesday and Thursday of that week, footfall in high streets and shopping centres declined by an average of -7% on those two days, but only by -0.5% in retail parks. Indeed, the positive footfall result for out of town destinations in July, particularly the fact that footfall rose by +2.1% during day time trading hours, demonstrates that if the offer is right consumers will spend.”
NAM Implications:
- Government needs to take a longer view, factoring in the eventual impact of online/Amazon…
- …yet allow a rationalising of retail capacity in the High Street via rent, parking facilities/costs and business rates adjustment.
- In other words take a stance on the eventual desirable end point (numbers /location of shops) and adjust the cost-base to match.
- Meanwhile NAMs have to budget for a worst-case scenario of say a 50% reduction in outlet numbers/floor-space…
- …and find alternative routes to consumer.
