The British Retail Consortium (BRC) today reported a drop in the vacancy rates for shops in UK towns and cities, with the number of empty stores falling from 10.6 to 10.1 per cent in the last quarter. In London, the number of unfilled premises is even lower at only 7 per cent.
This news comes in spite of the fact that footfall on UK high streets continues to fall on average 0.5 per cent each month in the last quarter. Whilst London has the fewest number of empty stores, it has also experienced the steepest drop in footfall, down 1.8 per cent since July 2013. Only two regions, Scotland and the south west of England, recorded an increase in the number of shoppers.
Whilst high street retailers suffer a further fall in footfall this month, online sales are picking up again according to the IMRG Capgemini e-Retail Sales Index. Sales of £8.1 billion in July represented a 14 per cent improvement on July last year when £7.1 billion was spent.
What will please UK retailers most is the improvements seen in more expensive ‘big-ticket’ items. Adgild Hop, Head of Retail Consulting UK at Capgemini, commented on this development: “Earlier results this year had suggested that British shoppers weren’t averse to spending but just reluctant to splash out on the more expensive luxuries”. In July however, consumer confidence appeared to be improving with a “strong increase in big-ticket transactions”, a trend that retailers will be hoping to see continuing into the Christmas period.
The travel sector performed best in online sales in July, its strongest performance since 2010 (13 per cent year-on-year). The electrical sector also recovered from its dip after the World Cup, increasing by 19 per cent in July from a year-on-year increase of just 7% in June.
As a result of this recovery, the online retail industry in the UK looks to be back on track, says Tina Spooner, Chief Information Officer at IMRG. Spooner is generally positive, believing “we are still on track to see in excess of £100 billion spent online for the first time this year”.
The high street continues to be the hardest hit retail sector. The BRC claims that commercial property taxes are responsible for failing to attract potential retailers who lack confidence to invest in new or existing premises.