Shops shutter at record rate as COVID continues

In the third quarter of this year, the overall UK vacancy rate increased to 13.2 per cent, from 12.4 per cent in the second quarter – marking the ninth consecutive quarter of increasing vacancy rates.

All locations saw an increase in vacancies in the third quarter, with shopping centre vacancies increasing to 16.3 per cent from 14.3 per cent in the second quarter, according to the latest data from the British Retail Consortium (BRC) and the Local Data Company.

On the High Street, vacancies increased to 13.3 per cent in the third quarter, up from 12.4 per cent in the second quarter – remaining in line with the overall rate.

Retail park vacancies increased slightly to 9.2 per cent in the third quarter, up from 8.3 per cent in the second quarter, however they remain the location with by far the lowest rate.

BRC chief executive Helen Dickinson said that with a second wave of the pandemic underway, there has been a record increase in the number of shuttered shops.

“The uncertain climate has also meant that even those looking to expand are holding off making investments in new stores – as a result, we expect to see the retail vacancy rate continue to rise.”

She explained that the government’s business rates holiday has mitigated some of the impact of the pandemic on shop vacancies and local communities, but warned that if retailers see a return of 100 per cent business rates next April, the consequences will be severe.

“The government should ensure that rates bills reflect current market reality by continuing a level discount at 50 per cent, thereby creating a more sustainable cost base for businesses so they can continue to trade and invest in recovery and longer-term growth.”

Lucy Stainton, head of retail and strategic partnerships at the Local Data Company, said that despite the record increase, it’s not right to assume that this spells the end of physical retailing, although it does reflect the immense pressure on operators trading through a pandemic.

“Shopping centres in particular have struggled, being so exposed to fashion and restaurant operators, as well as having less ‘essential retailing’ to help retain footfall in lockdown periods.

“While the vacancy rate on retail parks is on an upward trajectory, these locations are becoming increasingly popular with consumers who can drive to these sites and readily socially distance in larger format stores,” she continued, adding: “These units then could become more attractive to retailers who are looking to expand and make the most of the availability of space.”

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