Demand for warehouse space has hit a decade low as the online shopping boom fades post-pandemic.
According to CoStar Group, the number of companies vacating warehouses has surpassed those acquiring them for the first time in 11 years.
Online giants such as Amazon, Boohoo and Asos have downsized their warehouse occupancy in response to the declining demand for online purchases.
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According to the Telegraph, major supermarkets, including including Sainsbury’s and Co-op, have also begun to sublet space as home grocery delivery demand falls and shoppers hunt for in-store bargains amid the cost of living crisis.
Sainsbury’s has already shuttered two of its Argos warehouses and is planning to sublet further space in an attempt to cut costs.
Back in 2020 it shut most Argos shops on the high street and moved 150 of them into its Sainsbury’s stores, cutting thousands of jobs in the process.
While last week it was revealed that Argos would be closing 100 stores in the UK over the next year, with its high street branches set to be replaced by concessions inside Sainsbury’s.
In a similar move, Asos said it would be closing three of its smaller warehouses this year, while Boohoo has also been forced to shed space as people limit online shopping.
CoStar Group market analytics director Grant Lonsdale told the title: “With cost-of-living pressures weighing on consumers, many online and bricks-and-mortar retailers, as well as the third-party logistics providers that service them, are re-evaluating their storage and distribution space requirements in a bid to optimise overheads.
“This trend is likely to persist into next year.
“Weakening occupier demand together with high levels of construction activity suggests vacancy rates will rise further, particularly in the case of larger warehouses.”
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