Approximately 6,000 shops have closed across the country over the past five years as vacancy rates reach “critical levels”, shows recent data.
According to the latest British Retail Consortium-Local Data Company (BRC-LDC) vacancy monitor, the overall vacancy rate increased to 13.9 per cent after rising by 0.1 percentage point in the second quarter of this year. The number of outlets lying vacant in shopping centres was worse at 17.8 per cent.
Geographically, the highest rates of empty storefronts in the second quarter were in the northeast, followed by Wales and Scotland. Greater London, the southeast and the east of England again had the lowest vacancy rates.
Helen Dickinson, chief executive of the BRC, said crippling business rates and the impact of the Covid lockdowns were a “key part of decisions to close stores and think twice about new openings”. Rising interest rates and inflationary pressures were also to blame.
Dickinson called on the government to review the “broken business rates system” to bring more vibrancy into high streets and town centres and prevent further store closures.
“Currently, there’s an additional £400 million 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 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 unviable. Government should go one step further and freeze rates bills next year,” she said.
Lucy Stainton, commercial director at the LDC, said rising interest rates and cost pressures were among reasons for the increase.
“Vacancy has reached critical levels, highlighting an ever-increasing need to redevelop units to breathe life back into retail destinations,” she said. “Current challenges to businesses have been compounded by tightening discretionary spend and a dip in confidence among consumers.
“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.”