Britain loses 6,000 storefronts in five years, says BRC

• In Q2 2023, the overall GB vacancy rate increased to 13.9%, which was a 0.1 percentage point worse than Q1. It was a 0.1 percentage point better than the same period last year.
  
  
• Shopping Centre vacancies remain unchanged at 17.8%, the same level as Q1. 
  
  
• High Street vacancies increased to 13.9% in Q2, 0.1% worse than Q1.
  
  
• Retail Park vacancies fell to 8.1% in Q2, a 0.6 percentage point improvement from Q1 2023. It continues to remain the retail location with by far the lowest vacancy rate. 
  
  
• Geographically, Greater London, Southeast and East of England again had the lowest vacancy rates. The highest rates were in the Northeast, followed by Wales and Scotland.

Helen Dickinson OBE, Chief Executive of the British Retail Consortium, said:
“The past five years saw Britain lose 6,000 retail outlets, with crippling business rates and the impact of the Covid lockdowns a key part of decisions to close stores and think twice about new openings. The North and Midlands continue to see the highest amount of empty storefronts. London’s vacancy rate remains the lowest, improving over the last quarter thanks to the opening of new flagship stores, more office workers, and tourists visiting the capital.”

“To inject more vibrancy into high streets and town centres, and prevent further store closures, Government should review the broken business rates system. Currently, there's an additional £400m going on retailers' bills next April, which will put a brake on the vital investment that our towns and cities so desperately need. The Government announcement earlier in the week about making changes of use to vacant units easier is welcome but it’s important local councils have a cohesive plan, and don’t leave gap-toothed high streets that are no longer a customer destination and risk becoming inviable. Government should go one step further and freeze rates bills next year. ”

Lucy Stainton, Commercial Director, Local Data Company, said:
“The headline findings from Q2 are unlikely to have come as a surprise to anyone, with economic pressure from rising interest rates and inflation already mounting as the year began. Current challenges to businesses have been compounded by tightening discretionary spend and a dip in confidence among consumers. The economic headwinds that have made the headlines have filtered into the data, reflected in a slight rise in the overall vacancy rate.

“The high street has seen some of the most notable impacts, with rising rents and increased competition putting pressure on small and independent businesses, who may struggle to meet high operating costs. Across all location types, vacancy has reached critical levels, highlighting an ever-increasing need to redevelop units to breathe life back into retail destinations.

“Retail is a diverse industry; each retail and leisure subsector faces its own unique challenges, but also, importantly, has its own unique strengths. As the only location type to see a decrease in long-term vacancy (more than three years) this quarter, retail parks continue to prove resilient, bolstered by their strong occupancy fundamentals and relatively small lot sizes. Retail parks have shown us excellent examples of agile strategy in action, splitting larger units into smaller ones or converting space for alternative uses to successfully revitalise vacant stock. The current climate is undeniably difficult, but it should not be overlooked that today’s retailers are more innovative and future-thinking than ever.

“With the continuing trend in mind, we do not foresee any improvements to vacancy rate in future. However, given that the latest rises in vacancy have not been particularly significant, we anticipate that any increases in the near future will be gradual.”

-ENDS-

Notes:

• 6,000 retail outlets lost in the top 650 town centres in Britain, 2.8% of the total.
• The BRC-LDC Vacancy Monitor was launched at the height of the pandemic, and has run for several years, informing readers about the changes that have taken place in our town and city centres. BRC and LDC have now decided that it is the right time to end the series. Moving forward, the BRC will be looking at what other data we can provide to inform debate and discussions surrounding retail, and will share details in due course.

More empty shops, as Welsh retailers call for action on cost pressures

• In Q2 2023, the Welsh vacancy rate worsened to 17.0%, increasing from 16.5% in Q1 2023. It was 0.3 percentage points worse than the same point in 2022.
  
  
• Shopping Centre vacancies improved to 22.2%, compared to 22.3% in Q1 2023.
  
  
• On the High Street, vacancies worsened to 16.9%, up from 16.3% in Q1 2023.
  
  
• Retail Park vacancies improved to 10.2%, compared to 10.7% in Q1 2023. It remains the location with by far the lowest rate.
  
  

Sara Jones, Head of Welsh Retail Consortium, said:

“The number of empty Welsh shops continued to grow in the second quarter of 2023, with over one in six shops lying vacant and with Wales remaining one of the worst performing nations and regions compared to the UK average rate. The upward trajectory is bad news for local economies who rely upon retail as a mainstay of the high street, and as a key contributor to jobs and growth. This troubling increase in empty units wasn’t universal across all destinations however, with retail parks and shopping centres seeing a small improvement despite a further deterioration on our high streets.”

“The Welsh Government’s recently launched Retail Action Plan has the potential to offer real opportunity for growth for Welsh retailers, but it must be backed up with early action and intervention to enable that growth to be realised. As the Finance Minister considers her budget for the forthcoming financial year, we are calling for a freeze on business rates to prevent businesses being thwarted with eye watering uplifts to their rates bills. This needs to be coupled with a greater awareness of the cumulative impact of public policy making, and a moratorium on government-imposed costs. Retailers are doing all they can to shield consumers from the impact of increasing costs pressures but, with further regulation planned, this will be increasingly hard for retailers to absorb which will be bad news for business and bad news for consumers.”

Lucy Stainton, Commercial Director, Local Data Company, said:
“The headline findings from Q2 are unlikely to have come as a surprise to anyone, with economic pressure from rising interest rates and inflation already mounting as the year began. Current challenges to businesses have been compounded by tightening discretionary spend and a dip in confidence among consumers. The economic headwinds that have made the headlines have filtered into the data, reflected in a slight rise in the overall vacancy rate.

“The high street has seen some of the most notable impacts, with rising rents and increased competition putting pressure on small and independent businesses, who may struggle to meet high operating costs. Across all location types, vacancy has reached critical levels, highlighting an ever-increasing need to redevelop units to breathe life back into retail destinations.

“Retail is a diverse industry; each retail and leisure subsector faces its own unique challenges, but also, importantly, has its own unique strengths. As the only location type to see a decrease in long-term vacancy (more than three years) this quarter, retail parks continue to prove resilient, bolstered by their strong occupancy fundamentals and relatively small lot sizes. Retail parks have shown us excellent examples of agile strategy in action, splitting larger units into smaller ones or converting space for alternative uses to successfully revitalise vacant stock. The current climate is undeniably difficult, but it should not be overlooked that today’s retailers are more innovative and future-thinking than ever.

“With the continuing trend in mind, we do not foresee any improvements to vacancy rate in future. However, given that the latest rises in vacancy have not been particularly significant, we anticipate that any increases in the near future will be gradual.”