The odds are stacked against the likelihood of retailers returning to Britain’s high streets, concludes a report on empty shops, published today.
The Local Data Company’s latest Shop Vacancy report shows that vacancy rates stabilised in 2011. But it warns that the future looks bleak as consumer spend moves increasingly away from the high street, and it predicts that vacancies will rise again this year.
LDC reviewed empty shop figures in over 700 town centres. It found that while the national rate has been stable at 14.3% the wide differences in vacancies – from 0% to 36% – continue to affect an increasing number of centres.
Prime centre “core” areas remain healthy but secondary centres and outlying areas are struggling as multiple retailers exit for larger centres, out-of-town locations or as a result of business failure. The extremes in the changing fortunes of towns with regards to vacancy are from decreases of 12% to increases of 15%.
The report says that one fifth of UK shopping malls are now thought to be in financial difficulties, with around 20 secondary shopping centres on the market. It highlights Nottingham’s 86-store Broadmarsh centre as symptomatic of the wider problem.
It was Westfield’s first acquisition in the UK in 2000 and the company had ambitious plans to redevelop and extend the scheme to 400 outlets on three floors. Planning permission was granted, but the economic climate then raised doubts as to whether the revamp would ever be profitable and the company announced the sale of its 75% stake in November to Capital Shopping Centres, owner of the competing Victoria Centre. The status of the redevelopment is, as yet, unclear.
The report says that underpinning the majority of town centres now are independents (defined as having up to five outlets) which occupy 66% of most town centres.
LDC identified marked regional differences in the fortunes of towns, with a significant majority of above-average vacancy rates occurring in the Midlands and north. The top 10 worst performers include Stockport, with a rate of over 30%, while 25% of shops in Nottingham, Grimsby, Stockton, Wolverhampton, Blackburn, Walsall and Blackpool are empty.
Conversely, the best-performing centres are mainly in the south and west. Although northern centres York and Harrogate see vacancy rates below 10%, so do Exeter, Kingston, Camden, Cambridge, Taunton, Salisbury and St Albans.
The report highlights the disappearance last year of well-known retail names such as Habitat, TJ Hughes, Barratts, Focus DIY, Hawkin’s Bazaar, Best Buy, Walmsley and Lombok, exacerbating vacancy rates.
It also points out that the proportion of retail spend captured by the high street has fallen from 49.4% in 2000 to 42.5% now, and says it is expected to be down to 39.8% by 2014.
The fastest-growing competitor to the high street – and to out-of-town retailing – it says, is ecommerce, whose share of sales doubled from 5.1% in 2000 to 10.2% in 2011 and which is expected to rise to 12.2% by 2014. It is a trend, says the report, which is likely to create even more surplus shops.
Commenting on the report’s findings, LDC director Matthew Hopkinson said: “The reality is that the odds are stacked against a positive take-up of shops and, as such, the new reality of 48,000 empty shops is here to stay unless an alternative use or purpose can be found.”