Empty retail units continue to increase

As the number of empty shops continues to rise, what may impact on this trend and how can the government help the high street?

The number of empty shops continues to soar, with one in seven across Britain now vacant.

All areas of the country have seen a rise in vacant shops, but the North of England has suffered the biggest hit, according to the British Retail Consortium (BRC).

In the first quarter of 2021 the overall GB vacancy rate increased from 13.7% to 14.1% in the final quarter of 2020.  It was 1.9 percentage points higher than in the same point in 2020.  

This marks three years of increasing vacancy rates.

After a third national lockdown, it is no surprise that the vacancy rate has continued to rise; the forced closure of thousands of shops during the first quarter of 2021 has exacerbated an already difficult set of trading conditions for the retail industry.  

It is estimated that there are around 5,000 fewer stores since the start of the pandemic, meaning 1 in 7 shops now lies empty.  

There is significant regional disparity in vacancies, with the North of England showing a greater increase compared to the rest of the country.

Shopping centres have been particularly exposed to the effects of the Covid-19 pandemic, principally having a lower proportion of “essential” retailing, as well as being exposed to categories which are in decline such as fashion, department stores and casual dining.  

However, early indications from the first few weeks of the unlocking have shown there is still significant demand for physical retail and eating out.

But with full business rates relief and the moratorium on aggressive debt enforcement ending in England this summer, many stores may never reopen.

The Government must ensure that the ongoing business rates review leads to a reform of the broken system and permanently reduces the cost burden which is leading to unnecessary store closures and job losses.

The devolved nations have already agreed to extend the business rates holiday until 2022 and England should consider following suit.

Several household names announcing further store closures or disappearing from our high streets entirely shows how challenging physical retail continues to be.

As consumer confidence continues to build momentum with reduced covid-19 cases, more of the population vaccinated and warmer weather, further fall out from the pandemic might be mitigated somewhat.

Additionally, there is ongoing redevelopment with retail stores being converted to other uses such as office space and residential property. This too may help stabilise the increase in vacancy we would otherwise expect to see continue into the next quarter of the year.

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