Shop vacancy rates in the UK stabilised in 2011 but the future looks bleak with vacancy rates forecast to rise again in 2012, according to the Local Data Company’s latest Shop Vacancy report.
Its Good and Bad News study reviews the shop vacancy figures of over 700 town centres.
While the national rate has been stable at 14.3% the wide differences in vacancy rates (from 0% to 36%) continue to affect an increasing number of centres, it says.
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, said researchers.
The extremes in the changing fortunes of towns with regards to vacancy are from decreases of -12% to increases +15%.
According to the Local Data Company (LDC), the report highlights the key issues driving vacancy rates and provides evidence of the reality of many town centres up and down the country.
Weak consumer confidence, rising unemployment, the growth in retail sales by supermarkets and the internet, a significant number of retail leases coming to an end and the uncertainty in the banking sector, all leads to the view shop vacancy rates are set to rise in 2012, it says.
A significant majority of the above average vacancy rates are to be found in the Midlands and North, reports LDC. Indeed, this applies to all the 10 worst performers including, for example, Stockport with a vacancy rate over 30%. Nottingham, Grimsby, Stockton, Wolverhampton, Blackburn, Walsall and Blackpool all have vacancy rates over 25%, it adds.
Similarly, the best performing centres are mainly in the South and West. Although York and Harrogate have vacancy rates below 10%, as do Exeter, Kingston, Camden, Cambridge, Taunton and Salisbury. St Albans is the best performer with an 8.2% vacancy rate.
Last year saw the disappearance of some well-known names from the high street including:
- Barratts, the shoe retailer with 191 stores and 391 concessions, went into administration in December 2011 after struggling for some years (it previously went under in 2009)
- Focus DIY, with 170 stores, applied for administration in May 2011 against a background of weak housing market activity
- Hawkin’s Bazaar, another gift retailer, appointed administrators at the end of December 2011, affecting 120 stores
- TJ Hughes, the discount retailer, fell into administration in June, affecting 57 stores around the country
However, no retail sector was immune from problems in 2011, said LDC. Electrical casualties included:
- Best Buy, the electrical chain owned by Carphone Warehouse. It hoped to operate 200 stores by 2013 in conjunction with its US partner but its 11 stores will now close
- Comet, the second-largest electricals group in the UK, was sold by KESA for £2.00
- Bennets, the Norwich-based electrical retailer, also went into administration in March with a loss of 14 branches
Fashion too felt the pain. Brands affected included:
- Alexon, which went into pre-pack administration at the end of September. The group has 990 outlets trading as Ann Harvey, Dash, Kaliko and Eastex. The group was saved when Sun European bought the company out of administration
- The 90 outlets of Jane Norman also went into administration at the end of June as, for the second time, did The Officers Club. Here though 46 of its stores have been sold to Blue Inc
- 2012 has seen Peacocks fall into administration with 700 stores affected – this after debt restructuring talks stalled
- Walmsley, Habitat and Lombok during 2011. The rumps of these fascias remain for the time being but overall some 75 stores have been closed
- Homeform, the parent of such fascias as Moben, Dolphin, Sharps and Kitchens Direct, also appointed administrators. The most likely outcome here is the brands will be sold as freestanding concerns
Further, the British Council of Shopping Centres estimates one-fifth of UK shopping malls are in financial difficulties, with around 20 secondary shopping centres already on the market, said LDC.
Matthew Hopkinson, director at the Local Data Company, said: “The stable top line rate of 2011 hides the significant breadth in town centre vacancy rates up and down the country and the structural issues that are at stake. 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.
“Technology is driving consumer behaviour to a world of engagement, entertainment and the ability to shop where, how and when we like. Town centres need to adapt to this changing environment if they are to survive and thrive.”