Fewer empty shops in Q1 2022 but uncertainty ahead as consumer confidence takes hit

Workers returning to offices and a lift in tourism has allowed some businesses to invest in repurposing and reopening empty units in Q1 2022, with high streets and retail parks benefitting the most.

However, it’s unclear how much rising living costs, the conflict in Ukraine and falling consumer confidence will impact on businesses and the vacancy rate in the future.

The overall shop vacancy rate in Q1 2022 decreased to 14.1%, which was a 0.3 percentage point down from Q4 2021. That was only the second quarter of falling vacancy rates since Q1 2018, according to the latest data from the BRC-Local Data Company Vacancy Monitor.

Vacancies on high streets decreased to 14.1% in Q1 2022, down from 14.4% in Q4 2021, while retail park vacancies decreased to 10.6% in Q1 2022, a 0.7 percentage point fall from Q4 2021, and remain the location with by far the lowest rate of vacancies.

Shopping centre vacancies also decreased, falling to 19% in Q1 2022, down from 19.1% in Q4 2021.

Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), said: “The first quarter of this year saw a large quarterly improvement in shop vacancy rates. The economy had fully reopened, with more city workers back in the office, and more tourists out on the streets. This allowed some businesses to grow and invest in repurposing and reopening empty units, especially in retail parks and high streets.

“Despite this improvement, the overall proportion of empty storefronts remains well above its pre-pandemic levels, especially in the north of England. While many northern regions saw the biggest quarterly improvement, they still have the highest vacancy rates in the country as they were hit harder by the pandemic and have a lower average level of disposable income.

“Much has changed with the cost of living rising and the conflict in Ukraine damaging consumer confidence. It remains to be seen how the increasing costs and the war in Ukraine will impact on businesses and the vacancy rate in the future.

“While people’s shopping habits have changed, the need for vibrant communities at the centre of our towns and cities has not. Government should look to reform business rates so that businesses can invest in these areas that need it the most.”

Lucy Stainton, Director at Local Data Company (LDC), added: “The latest figures show a continued, and welcome, reduction in empty units across nearly all regions in England as well as across both Scotland and Wales, as market recovery continues post-COVID.

“This decline in vacant space is being driven by further repurposing of retail space, growth in the independents sector and an increase in activity across the chains as well, as many brands are back on the acquisition trail after the pandemic stalled growth.

“While there are a number of well publicised economic headwinds on the horizon, we might still remain optimistic that a proactive, concerted focus on the future of consumer-facing real estate will yield further recovery.”