UK shop vacancy rates stood at 14.6 per cent for the first six months of the year as the North/South divide continued to grow, according to figures released today.
The Local Data Company (LDC)‘s latest shop vacancy report, derived from 506 town centres and 145,000 shops that it visited between January and June this year, found that vacancy levels remained unchanged from March which saw the highest rates since June 2008.
With a vacancy rate of 20.1 per cent, the North West of England was the worst performing region, followed by Wales, the Midlands and the North with an average of 18.5 per cent vacancy.
London was the only region to report a fall over the last 12 months, from 10.7 per cent to 10.1 per cent while retail parks saw the lowest overall vacancy at 8.1 per cent.
The LDC believes that the profitability of retail space has been negatively affected by the reduction in consumer disposable income, which has fallen significantly in the Midlands and North since 2005, while the growth in volume of retail space has added to retailers‘ woes.
Matthew Hopkinson, Director at the LDC, explained: “This report clearly shows the key economic and structural issues which are impacting town centres up and down the country.
“These issues still have some way to go before we see wide stability and positive change. Most importantly it shows that at the town level a widening gap in health exists between town centres depending on their location, offer and consumer profile.
“Fundamental national economic issues are being played out at a local level. An understanding of the impact of these changes, past and present, is the only way that concrete action can be taken to adapt to and plan for success.”
During this unpredictable period, regional towns seeking an opportunity to increase consumer spend must be mindful of serving the specific needs and spend of their customers, he added.
Liz Peace, CEO of the British Property Federation, pointed out that these issues need to be studied on a wider scale.
“In many places, we need to have a complete re-think about how vacant property could be redeveloped into new uses,” she said.
“That will require flexibility on the part of local planning authorities, but equally an acceptance from the property industry and its investors and lenders that in many cases previous values simply cannot be maintained and new lower value uses are the only option.
“This will be challenging – and there will inevitably be some further business casualties – but the alternative is a period of steady, inexorable and irreversible decline with unacceptable social consequences.”