Vacancy rate continues to rise with one in seven shops shuttered

Shop vacancy rate has increased by 2.1 percent year on year to 14.5 per cent in the second quarter of 2021, according to the BRC-LDC Vacancy Monitor.

The rate was 14.1 per cent in the first quarter, meaning at least one in seven shops in Britain have remained closed since the start of the year. The country has now witnessed over three years of increasing vacancy rates, starting from the first quarter of 2018.

“It comes as no surprise that the number of shuttered stores in the UK continues to rise, after retailers have been in and out of lockdown for over a year,”  Helen Dickinson, chief executive of the British Retail Consortium (BRC), said.

All retail locations saw an increase in vacancies in the second quarter, with shopping centre vacancies increasing to 19.4 per cent from the first quarter’s 18.4 per cent.  The high street vacancies increased to 14.5 per cent, remaining in line with the overall rate, and at the retail parks, vacancies increased slightly to 11.5 per cent, up from 10.6 per cent in the previous quarter.

“Almost one in five shopping centre units now lie empty, and more than one in eight units have been empty for more than a year. Retail parks have also been impacted from the loss of anchor stores and their vacancy rate is rising quickly,” Dickinson added.

The south of England, including London, has seen lower vacancy rates, while the north, where disposable income is lower, continues to have a higher proportion of closed shops.

Dickinson warned that the vacancy rate could rise further now as the Covid-19 business rates holiday has come to an end.

“The Government must ensure the ongoing business rates review leads to reform of this broken system, delivering on its commitment to permanently reduce the cost burden to sustainable levels. The longer the current system persists, the more jobs losses and vacant shops we will see, hurting staff, customers and communities up and down the country,” she added.

Lucy Stainton, director of Local Data Company (LDC), noted that the vacancy now sits at the highest rate ever recorded by the firm.

“With appetite for new space increasing but still modest, there will simply never be enough demand to meet the supply. The property market will be forced to think of more creative ways to utilise this space, to avoid exacerbating the already high rates of long-term voids across our retail destinations which are not only unsightly and costly for landlords, but also have a negative impact on surrounding stores,” she said.