More than 200 shopping centres across the UK are in danger of collapsing into administration as major anchor stores decline.
According to the National Retail Research Knowledge Exchange Centre’s retail analyst Nelson Blackley, small towns are in danger of “catastrophic” ramifications as hundreds of shopping centres teeter on the brink of collapse.
Blackley says a number of factors, including the demise of key big-box anchor stores like BHS and Toys R Us and the rise of online shopping – which he added has grown faster in the UK than almost anywhere else – had hit the locations hard.
“If the major anchor store moves out, that has a halo effect on other stores in that centre,” Blackley said.
“It’s a downward spiral and you can’t fill shopping centres with nail bars and vape shops.
“People are suggesting a number of leading national retailers are on the edge and may close and that would bring shopping centres down with them.
“The collapse of BHS, two years ago, left empty units in around 200 shopping centres and more than half of those large, empty units have not yet been filled.”
The majority of the centres at risk are reportedly owned by US private equity firms under deals which will soon require refinancing.
“They have to return money to their investors,” Blackley saidd.
“That’s not looking very likely. Frankly, the centres are either going to have to be sold at a lower price or have capital injected in order to regenerate and we don’t see banks having an appetite for that.”
Should the centres fall into administration, Blackley believes this could result in increased vandalism and crime in the affected towns.
Fujitsu’s digital retail lead Jat Sahi said many of these centres’ demise is because retail has moved on so quickly in recent years.
“Many of these centres were simply designed for a different time – a time when people wanted (and needed) access to a select range of products and brands in one, easy-to-reach location,” he said.
“At a time when buying in-store was the only reliable option, it made sense to make one big trip to a shopping centre to stock up on clothes, birthday presents, or holiday items.
“No wonder that so many shopping centres offer an identical range of stores and products; these were the basics that consumers wanted easy access to.
“The rise of online retail, however, undermined the convenience of the shopping centre trip.”