Retail vacancies hit worse level in four years
The number of empty retail units in town centres hit 10.3% last month – the worse level since January 2015 – prompting BRC CEO Helen Dickinson to renew calls on the Government to relieve some of the pressure on the struggling high street.
Retail footfall also declined by 1.9% in July, compared to the same point last year when it declined by 0.9%. This is the worst decline for July since 2012, according to the latest BRC Springboard figures.
Shopping centres were the worst hit with footfall down by 3.1% followed by the high street which was down by 2.7%. The three month averages however show the high street was down by an average of 4% over the period with shopping centres down 3%.
Retail parks showed modest positive growth with July up 1.2% and a three-month average growth of 0.2%.
Dickinson said: “Retailers have faced a challenging environment this month, with declines in footfall on High Streets and Shopping Centres. Sluggish sales growth and declining footfall also contributed to the rise in town centre vacancies, which rose to their highest level since January 2015. High streets and town centres play an important part in our local communities, and we should be concerned by the rise in empty store fronts.
“If the Government wishes to avoid seeing more empty shops in our town centres then they must act to relieve some of the pressure bearing down on the high street. Currently, retail accounts for 5% of the economy, yet pays 10% of all business costs and 25% of all business taxes. The rising vacancy figures show this is simply not sustainable. We need an immediate freeze in rates, as well as fixing the Transitional Relief, which leads to cornershops in Redcar subsidising banks in central London.”
Springboard marketing and insights director Diane Wehrle said the retail parks had proved more resilient as they had more successfully bridged the convenience and experience gap.
“Consumer demand is ever more polarised between convenience and experience, and the stronger performance of out of town destinations where footfall rose by +1.2% in July reflects the fact that retail parks are successfully bridging the convenience-experience gap. They not only offer consumers accessible shopping environments with free parking and easy click and collect opportunities for online purchases, but many also combine this with an enhanced experience that includes coffee shops and casual dining restaurants, and some also have leisure facilities."
It emerged this morning that Tesco CEO Dave Lewis had been drumming up support among other supermarkets and non-food retailers for its proposal to Government to cut business rates by 20% and offset it with the introduction of a 2% online sales tax. He has some support for his ideas among other supermarkets, but not all are convinced as they are concerned it will curtail their ability to grow their online businesses.