More than 10 per cent of high street stores across the UK now lie vacant as property costs continue to rise and retailers respond to consumer demand for online alternatives.
National town centre vacancy rates rose to 10.1 percent in the third quarter of this year to July, according to new research from the British Retail Consortium (BRC) and consumer counting service Springboard. This is the first time vacancy levels have passed 10 percent since April 2015 and marks an increase of five basis points on the previous quarter.
The figures provide an unwelcome reminder of the heavy burden of property costs and business rates on the retail sector, Helen Dickinson OBE, chief executive of the BRC, said.
“The retail industry is undergoing a transformation driven by technology which is changing the way we shop. Shoppers are demanding more a personalised service and a seamless interaction between physical and digital. With UK property taxes higher than anywhere else in the developed world they act as a disincentive to operate physical space.
“Today’s figures should serve as a wake-up call. If property costs in general, and business rates in particular, continue ever upwards, we should all be concerned about the impact on our local communities up and down the country.”
However, given the political uncertainty in the lead up to the EU referendum – and its resultant impact on the commercial property sector which saw the suspension of several property funds – the next quarter is likely to prove more telling of the fate of Britain’s high street.
“The April to June quarter can prove irregular, as post-Christmas pop ups and temporary stores disappear from the high street and the EU referendum and political and economic uncertainty of the last quarter will have deterred some retailers from taking on leases”, said Diane Wehrle, marketing and insights director at Springboard.
“The next quarter’s figures will be the ones to watch to get a clear picture on any continued increase in vacancy rates, which would be concerning for town centres across the UK.”
Footfall in July fell 0.4 per cent year-on-year across the UK, with most losses occurring in retail parks and shopping centres.