How a rise in retail vacancies can affect the UK’s high streets

With the UK going in and out of lockdowns due to the Covid-19 pandemic, the rate of retail store vacancies has surged. Retail Gazette finds out what the effects are for the UK's high streets as stakeholders ponder what to do with the swathes of empty shops in an increasingly digital world.

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Vacancy rates are now at their highest in five years.

Retail vacancy rates have been rising for the past few years, but this was undoubtedly accelerated by the Covid-19 pandemic over the last 13 or so months.

With the UK going in and out of lockdown since March last year, the forced closures of thousands of shops, and consumers being reluctant to visit crowded areas like shopping centres or city centres, it comes as no surprise that the number of shuttered stores continues to rise.

The UK’s high streets are at risk of facing empty stores. In the long-term, empty store fronts could contribute to further reduced footfall, which could affect surrounding businesses.

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Retail vacancy rates increased to 14.1% in the first quarter of 2021.

“Retail has always been central to tackling issues like social mobility and youth employment so the closure of many high street shops could have a long-term impact on both of these issues for years to come,” said Chris Brook-Carter, chief executive of retail industry charity RetailTrust.

“For many smaller towns and cities up and down the country the high street represents the heart of the community and, as we’ve seen during the pandemic, removing opportunities for people to connect can have a huge detrimental impact on our collective wellbeing as well as a town’s economic prosperity.”

The most recent research by the BRC-LDC Vacancy Monitor found in late April that the overall retail vacancy rate increased to 14.1 per cent in the first quarter of 2021, marking a 1.9 per cent rise from the same period last year.

The vacancy rate was also up from the 13.7 per cent recorded in the final quarter of 2020 and marks three consecutive years of increased retail vacancies.

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Councils are already attempting to transform the empty retail units.

The situation worsened in the City of London, which witnessed a 47 per cent year on year rise in the number of vacant commercial property units in February. Vacancy rates in the City are now at their highest in five years, retail data consultancy Local Data Company (LDC) said.

Councils are already attempting to transform the empty shop units left behind by retailers. Most recently, empty Debenhams, Homebase and River Island shops across England and Wales were converted into climate emergency centres.

Meanwhile, John Lewis Partnership – which has cut the number of shops from 51 to 34 since the pandemic began – said last July that it was exploring the possibility of branching out to private rented housing, through the conversion of some of its retail space, as part of five strategic steps to grow the business.

More recently, new emerged that the former Debenhams store in Leicester could be converted into 300 rental flats.

“The high street is transforming from a retail focus to a broader mix of shops, leisure and housing,” BRC property policy adviser Dominic Curran told Retail Gazette.

“When properly planned and managed, bringing people back into town centres has many advantages – it increases the supply of homes, boosts the viability of shops and services, and adds to the vibrancy of our communities.

“While vacant properties decrease the attractiveness of these areas, they do offer the opportunity for independent retailers to capitalise providing reasonable rents can be offered.”

Jonathan De Mello, member of the KPMG/Ipsos Retail Think Tank, added that in the short-term, there would vacant store fronts which could make high streets appear unattractive. But he said the long-term prognosis was better, as there are new occupiers entering the market and looking to take space.

“This may not necessarily be a retail occupier,” he said.

“Often – particularly with large spaces such as vacant department store buildings – this can be a mix of uses, such as leisure, offices, residential and even medical.”

Last weekend, Debenhams officially left the high street for good. The department store chain closed down its remaining 28 stores across the UK on Saturday, marking the final nail in the coffin in its 243 years of trading on the high street. It had closed down 21 stores on the Thursday prior, and in the week ending May 8 it had shut down 52 stores.

Although Debenhams had suffered declining revenues for the past few years as shoppers moved away from traditional department store models, the enforced closure of sites during the pandemic was the final straw, resulting in the retailer falling into administration in April last year – just weeks after the first UK-wide lockdown began.

Debenhams then went into liquidation in December after the administration process failed to secure any buyers to save the business. About a month later in January, its brand, ecommerce operations and assets were purchased by Boohoo Group in a £55 million deal. The deal did not include Debenham’s store estate.

In 2018, before it underwent separate, pre-pandemic administration and CVA processes the following year, Debenhams had operated from around 160 stores in the UK. Covid had accelerated its store closures – by December, when it fell into liquidation, it numbered 118 stores.


Sir Philip Green’s former Arcadia Group retail empire – of which Topshop, Dorothy Perkins and Burton were a part – has also left a swathe of empty stores since since it fell into administration in December. The rescue deals it agreed with Asos and Boohoo Group meant that, like Debenhams, the stable of retail brands would continue to live online but its physical stores were to shut down for good.

Meanwhile John Lewis Partnership – which has not faced administration despite declining revenues and store closures – announced plans in March to not reopen eight John Lewis stores. This was in addition to the eight it had already announced last year – meaning 16 store closures since the start of the pandemic.

The partnership said at the time that the eight shops earmarked for closure – which will affect 1465 staff – were financially challenged prior to the Covid-19 pandemic, and that it did not believe their respective trading performances could be improved.

Despite the store closures, John Lewis provided a glimpse of hope after the department store’s boss Pippa Wicks said in April that the business did not have any more “proposed closures” as it “would not be appropriate for customers or partners”.

De Mello said there was a “chronic lack of quality in town residential space in the UK” – and an excess supply of poor quality retail space.

“However, this needs to be regulated and zoned appropriately – as there is potential to break contiguous retail frontage if not,” he said.

“This would lead to a spiral of decline for the remaining retailers in the town.”

Before the pandemic, the Footfall and Vacancies Monitor from BRC and Springboard found in August 2019 that the national town centre vacancy rate was 10.3 per cent in July that year, marking a further increase on the previous quarter rate of 10.2 per cent and the highest since January 2015.

This also marked the worst decline for July since 2012.

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John Lewis Partnership announced plans in March to not reopen eight John Lewis stores

“Vacancy rates across Great Britain are continuing to rise and whilst this is a trend we were seeing pre-pandemic, there is no doubt that the impacts of Covid-19 are evident in the increasing speed of rising vacancies,” LDC commercial director Lucy Stainton told Retail Gazette.

“As the market starts to unlock, we will likely see further permanent closures filtering through as we get a better read on the businesses which are unable to survive once various government initiatives cease.”

De Mello said it was important for stakeholders within a town centres to conduct a “property needs” survey to fully evaluate supply and demand in their town and the extent of any gaps through benchmarking. This could then help identify precisely which occupiers to seek to fill these vacant spaces.

“There is definitely an opportunity for independent retailers to come to the fore,” he added.

“Independent retailers have been boosted by a rise in local spending given the various lockdowns we have witnessed and with home working here to stay to some degree even post-Covid, independent retail should continue to perform well.

“Given the ‘correction’ in the property market and prevalence of turnover based rental deals they can now seek to secure formerly prime spaces occupied by multiple retailers that have failed – whereas in the past they were ‘priced out’ of such spaces.”

Stainton agreed. She said there could be an opportunity for independent businesses to continue to open, in turn, “creating more diverse and unique retail centres”.

“The independents sector has proven much more resilient to date. With further available property in more prime locations and potentially more flexibility from landlords,” she said.

Mike Cherry, national chair at the Federation of Small Businesses, said he wanted to see local authorities working with small, independent businesses that want to either set up shop or expand their existing premises.

“Two in five small firms say making empty units readily available to businesses to let is one of the biggest changes that could be made towards bolstering their high street,” he told Retail Gazette.

“Local authorities can really get behind solving this, putting together renewal plans for the largest retail and commercial spaces on their high street.

“So, if these properties suddenly become vacant, a plan already exists to make the space available to smaller businesses if there’s no obvious alternative on the horizon.

“We also want to see councils regularly publishing and updating a list of empty commercial properties, with initiatives to bring long-term empty commercial units back into use.

“By encouraging existing small businesses to thrive – and new ones to start up or occupy empty units, we have a fighting chance of keeping our high streets alive.”

Brook-Carter added that repurposing vacant space for new and independent retailers or hospitality and leisure businesses would help to protect the “social, economic and cultural benefits of our high streets and town centres by creating new employment and driving footfall”.

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