One in seven shops continues to lie empty while more shops are built and leisure units take the lead in growth rates.
That’s the headline news from The Local Data Company’s latest report on vacancy rates entitled Shopped Out. It analyses over 1,900 town centres, shopping centres and retail parks visited in the first half of 2013. Whilst the shop vacancy rate in the top 650 town centres has remained stable at just above 14%, it masks significant differences in performance by location, researchers found.
The north/south divide is clearly apparent with the North West critical at one in five shops lying vacant. Of the top 25 worst centres for vacant shops, all of whom are above 25%, 21 are in the North, Midlands or Wales. Conversely, of the top 25 best performing centres with the least vacant shops, 22 are south of the Watford Gap.
Small towns (<200 shops) are in the healthiest state at 9.2%. Retail parks follow at 9.6% but have shown the most significant decline in the last six months with a rise of 0.8%. High profile casualties such as Comet will have contributed, said The Local Data Company. The most distress in vacancy rates overall is to be found within shopping centres where the average is 16.1%, which is significantly above large cities and towns (400+shops) at 13.5% and medium towns (200-399 shops) at 11.9%. This is at an all time high from 15.6% in 2012.
Regional analysis shows significant variations between different areas. Shop vacancy in London is 9% whilst in the North West it is more than twice that at 20%.
Of most surprise is that whilst one in seven shops continue to remain empty, a further 403 shop units have been added to the stock in the first half of 2013, which is a 0.3% growth. Greatest growth, however, is seen from leisure uses, which have grown at three times this rate at 0.9%, which is an additional 525 units.
- In H1 2013 the GB shop vacancy rate has remained stable at 14.1% (-0.1% on 2012)
- The number of vacant shops empty shops in the top 650 town centres is 22,339, which is the equivalent of 23 Sheffield city centres lying empty
- The number of food and beverage (leisure) units has expanded at three times the rate of shops, +0.9% v +0.3%
- Whilst we have already identified oversupply of shops in Great Britain, the stock has grown in the last six months by 403 units
- Wales has the highest national shop vacancy rate at 17.5%
- Scotland and Wales have shown an improvement in shop vacancy rates by -0.6% and -0.5% respectively whilst England’s worsened by 0.1%
- The best performing region by a long way (3.4%) is London at 9.4%
- The worst performing region remains as the North West at 20.1%
- The East Midlands has shown the greatest improvement at -0.4%
- Shopping centres continue to have the highest overall vacancy rate at 16.1%, followed by large (13.5%) and medium (11.9%) town centres, retail parks (9.6%) and small town centres (9.2%)
- Retail Parks, whilst best performing overall, see similar differences to towns and shopping centres with 63 basis points difference between the highest regional retail park vacancy in the North East (13%) and the lowest in the South West (6.7%)
- Shopping Centre vacancy is clustered in the range between 13.5% (North East) and 18.2% (North West) with London (10.2%) and the West Midlands (22.2%) significant outliers
Matthew Hopkinson, director at the Local Data Company, said: “This report clearly shows that whilst the rise of empty shops has stalled it still remains stubbornly high for many towns up and down the country. Since August 2010 the national average has been above 14%, with a significant number being ‘long term sick’ with little or no prospect of reoccupation as shops. In the top 650 town centres alone these empty shops equate to 23 Sheffield city centres being devoid of any trading shops or leisure businesses. To add to this problem a further 403 shop units have been added to town centre shop stocks in the first half of 2013 (+0.3%).
“Demolition or alternative use is the only option for the vast majority of these ‘surplus to requirement’ shops. To that end restaurants, bars, cafes and even betting shops have come to the rescue as the growth of leisure takes off in our town centres. Subject to planning, they will be able to absorb some but not all of this excess stock, which is forecast to increase. Leisure uses have grown at three times the rate of shops in the first half of this year. This is an increase of over 500 units in the first half of 2013 (+0.9%).
“Both the Portas and Grimsey high street reviews highlight the impact that vacant shops are having on communities up and down the country and call for Government to take action in a wide number of areas. What is common to all is that we have too many shops in this country and many are not fit for a role within the new omni-channel/digital environment. As the LDC data shows this problem is felt more acutely north of the Watford Gap where economic challenges are greater than in the South along with the greatest disparity in business occupation costs seen between rental decline and business rate increases.
“Town centres are a key component of maintaining a social and vibrant ‘human’ community so they cannot be left to rot with over 22,000 empty shops for the last five years. Now is the time for action and not reaction. Click and collect shows how complimentary bricks and clicks are and how important it is for retailers to maintain a physical relationship with their customers, which can only be achieved through shops.”