LDC: High street life returns as shop births outnumber shop deaths

The number of occupied shops grew in January, as openings rose faster than closures fell, according to LDC (Local Data Company).

LDC’s Dynamic Location Intelligence Bulletin for February said: ‘More shops opened than closed yet again, leading to higher occupancy. Vacancy rates continued to fall, as net openings chipped away at the number of empty units.’ Shop numbers in January maintained the trend established in late 2016, continuing to recover ground lost in the mid-2016 slump.’

LDC regularly visits over 2,700 towns and cities, retail parks and shopping centres. Each premises is visited and its occupancy status recorded as occupied, vacant or demolished. Vacant units are units which did not possess a trading business at that location on the day visited. The shop vacancy index is based on the shop vacancy rates of the top 650 town centres, based on the Communities and Local Government (CLG) retail core boundary definition. Shops are defined as comparison (non-food finished goods), convenience and service retail uses.

The rolling three month averages in these 2,700 locations show accelerating net growth in numbers. While openings were slightly below those in December, closures were at a lower level than for some time.

Once again, comparison shops were still in decline, although only by a small net amount, while convenience, leisure and service categories all experienced growth in numbers – with leisure outlets experiencing the strongest growth of all.

Location types enjoyed differing fortunes, but all three were good or improving. Towns centres plunged deeply into losses of shops in mid-2016, but are now back onto a rising trend and in positive territory.

Shopping centres show a similar growth curve, recovering from a slump in the middle of last year. Retail park net openings have moderated, but continue on their long-term growth path.

Multiples (defined by LDC as brands with more than five stores) moved back into growth in numbers, with openings rising and closures falling. Growth in the number of independent businesses accelerated for the fifth month in a row on a strongly rising net curve, even though the actual numbers of openings and closures remain a little subdued.

In January, the retail vacancy rate of 12.1% fell for the second month in a row to its lowest level since peaking in 2010. The leisure vacancy rate also turned down to 8.1%, although it remains to be seen if this improvement will continue as in the longer term leisure vacancy has been rising.

The ‘all vacancy’ rate (derived from both of these indices) fell to a new low of 11%. This still leaves one in nine retail and leisure units standing empty.

The end of year improvement restarted the gradual reoccupation that began in September 2012 when vacancy stood at 14.6%, but which had been on pause for eight of the12 months in 2016.

LDC director Matthew Hopkinson commented: “The January data shows some optimism for what’s happening on Britain’s high streets. Shop openings are subdued but stable, but the rate of shop closures is dropping. The result is an encouraging beginning to a reversal of the net loss of retailers that we saw in the middle of 2016.”

He added: “This is even evident in the long term trend of decreasing numbers of comparison shops which, although still experiencing a net loss, have seen a significant improvement in this vital sign since the middle of last year.

“The mutually beneficial relationship of bricks-and-clicks is now clearly evident. One to watch is the leisure market, which continues to open more outlets than the others combined – and recent news suggests that this bubble is certainly deflating and may yet burst in 2017.”

His final comment was: “The rebound in independent businesses occupying space in town centres has been impressive and has been gaining strength.

“The timing of this is fascinating, as businesses are beginning to assess the impact of their new rateable values on the rates bills that they will have to pay from April. Will this suck some of the vitality from this sector, or will it continue to grow regardless?”

www.localdatacompany.com

 

LDC’s January openings, closures and net changes to shop numbers

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