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Shop vacancy rate hits record high in April

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Town centre vacancy rates in the UK reached a record high last month despite a rise in footfall over the period, according to figures released today.

Shop vacancy rates reached 11.9 per cent in April, according to the British Retail Consortium (BRC) Footfall and Vacancies Monitor, up from 10.9 per cent at the start of the year and hitting its highest rate since the survey began in July 2011.

BRC Director General Helen Dickinson said that more needs to be done to support retailers across the country.

“It’s a major concern that the vacancy rate has reached a record high, driven by increases in almost every part of the UK, with some regions like the South West seeing a significant leap in empty shop numbers,” Dickinson commented.

“With high streets topping the agenda for many now, there’s a real opportunity here to seize the moment and stem the tide of further closures.

“Comparatively small steps to tackle deep-rooted issues such as parking, accessibility and rising business costs could make a huge difference to the health of town centres.”

Business rates have been a vital issue for British retailers in recent months and the BRC expressed disappointment earlier this year when Chancellor George Osborne ignored calls to freeze business rates in a bid to reduce costs.

Ross Bailey, Founder of online pop-up marketplace Appear Here, told Retail Gazette that the figures are unsurprising and point to a new opportunity for the high street.

“When you compare the low overheads of e-commerce with the long rents and crippling rates on the high street, it’s easy to see why vacancies have gone up,” Bailey told us.

“But the appetite to go out to the shops with friends is still there, so in many ways retailers retreating to the relative safety of online are missing a trick.

“Retailers and landlords need to work together to find a modern solution to our shopping needs. One that accepts the need for convenience combined with demand for a physical retail destination.

“Put simply we need to make renting space flexible.”

Appear Here seeks to offer pop-up solutions to SMEs and entrepreneurs by matching vacant space with suitable businesses via its website, allowing two parties to connect to capitalise on empty space.

Bailey believes that, as retail evolves, brands are valued by the experiences they create and thus brand owners are becoming increasingly content-focused.

“Retailers need to realise that shoppers want something different from the products they can simply buy online; they want an experience,” Bailey noted.

“For our high streets to survive we need to make them fun and provide a reason to shop offline.

“Pop-ups are a great way to achieve this by creating a constantly changing high street, full of new products to pique the interest of bored consumers.

“For retailers, it provides the opportunity to find new customers and launch products, and for landlords it’s a way to fill empty spaces and avoid dreaded ‘ghost towns’.

“In the future, I expect to see retailers using high street shops in the same way they would an advertising billboard.

“But the big difference with this media space is it’s also transactional.”

Despite this record vacancy rate, footfall figures in April rose one per cent on a year earlier, the strongest performance since December 2011 as warm temperatures drove shoppers in-store.

High street footfall increased 3.4 per cent over the month while out-of-town footfall climbed 0.3 per cent, though shopping centres reported their lowest footfall so far this year, falling three per cent over the month.

Diane Wehrle, Retail Insights Director at Springboard, explained the cause of the varied figures, commenting: “With an annual decline in footfall of -2.3 per cent over the last quarter, managed shopping environments, rather than high streets have been the poorer performing retail locations in 2013.

“The disparity between their performance was particularly evident in April when footfall in shopping centres fell year on year by -3 per cent but increased by 3.4 per cent on the high street.

“This disparity is partly due to the fact that many of the high-profile retail failures – reflected in the increased vacancy rate - have been located in malls, creating holes in their retail frontages which have adversely affected their attractiveness to shoppers.

“The resilience of high streets is also likely to be a function of their diversity, as they have an offer that spans more than just retail.”

Published on Monday 20 May by Editorial Assistant

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