Vacancy rate worst in four years, BRC/Springboard monitor shows

Covering the four weeks 30 June – 27 July 2019 

  • The national town centre vacancy rate was 10.3% in July, a slight increase on the previous quarters rate of 10.2% and the highest since January 2015.
  • Footfall declined by 1.9% in July, compared to the same point last year when it declined by 0.9%. This is the worst decline for July since 2012.
  • High Street footfall declined by 2.7%. Following from the increase of 0.3% in July last year. The three-month average decline is 4.0%.
  • Retail Park footfall increased by 1.2%, following from July 2018 when footfall decreased by 0.5%. The three-month average growth is 0.2%.
  • Shopping Centre footfall declined by 3.1%, following July 2018’s decline of 3.4%. The three- month average decline was 3.0%.

Helen Dickinson, chief-executive, British Retail Consortium, said: “Retailers have faced a challenging environment this month, with declines in footfall on High Streets and Shopping Centres. Sluggish sales growth and declining footfall also contributed to the rise in town centre vacancies, which rose to their highest level since January 2015. High streets and town centres play an important part in our local communities, and we should be concerned by the rise in empty store fronts.

“If the Government wishes to avoid seeing more empty shops in our town centres then they must act to relieve some of the pressure bearing down on the high street. Currently, retail accounts for 5% of the economy, yet pays 10% of all business costs and 25% of all business taxes. The rising vacancy figures show this is simply not sustainable. We need an immediate freeze in rates, as well as fixing the Transitional Relief, which leads to cornershops in Redcar subsidising banks in central London.”

Diane Wehrle, Springboard marketing and insights director, said: “July was a much more challenging month for high streets and shopping centres than for out of town destinations. Some of the -2.7% drop in high street footfall was a consequence of a strong comparable of +0.3% last year when we had a continuous period of hot sunny weather, but for shopping centres – with the -3.1% drop being as almost as severe as the -3.4% drop in footfall last year – the weather clearly has less impact on footfall than the challenges created by the ongoing structural change in retailing. Indeed, the ongoing challenges faced by bricks and mortar destinations is reflected in the rising vacancy rate, which has increased in every quarter since January 2018 and now sits at 10.3%.

“Consumer demand is ever more polarised between convenience and experience, and the stronger performance of out of town destinations where footfall rose by +1.2% in July reflects the fact that retail parks are successfully bridging the convenience-experience gap. They not only offer consumers accessible shopping environments with free parking and easy click and collect opportunities for online purchases, but many also combine this with an enhanced experience that includes coffee shops and casual dining restaurants, and some also have leisure facilities.

“The attraction of retail parks was demonstrated clearly in the last week of the month when temperatures reached record levels. With temperatures peaking at nearly 40 degrees on the Wednesday and Thursday of that week, footfall in high streets and shopping centres declined by an average of -7% on those two days, but only by -0.5% in retail parks. Indeed, the positive footfall result for out of town destinations in July, particularly the fact that footfall rose by +2.1% during day time trading hours, demonstrates that if the offer is right consumers will spend.” 

Andy Burton, CEO of Tryzens, comments on survey findings that vacancy rates of UK shops are at their highest level in four years: “In light of a new survey by the British Retail Consortium and Springboard finding that the vacancy rate of UK shops was at 10.3% in Jul y- its highest level in over four years – Andy Burton, CEO at digital commerce consultancy Tryzens, outlines how high street retailers need to change their approach to e-commerce and in-store retail.

“The figures released today by the BRC and Springboard are another stark reminder, if one were needed, of the challenges faced by the UK retail sector and our high streets. The growth of eCommerce is often seen as the primary cause of the high street’s woes, but of course it’s not as simple as that. The rise of online shopping is not being driven by the failure of the high street per se, it is being driven by lifestyle, innovation, convenience and preference; online retailers have a store that is open 24/7, on any device and on a global scale. At the same time, many high street retailers aren’t able to offer shoppers what they want and should strive to make adjustments based on changing patterns of consumption.

“The high street still has a critical role to play in our lives and in the retail industry, providing local access, with see or try-before-you-buy. But If we’re going to rejuvenate the high street, retailers need to rethink the future of the store and have a fuller discussion about the role that the high street serves in modern Britain today.

“More than half of consumers now visit stores to see products in the flesh before buying online, while many begin their research online before coming into stores to make a purchase. Aligning everything is therefore critical and the retailers that are winning in the market are the ones that are leveraging the latest technology to drive innovation and improve the customer experience both in-store and online.

“Retailers should stop looking at e-commerce as a separate entity and start seeing it instead as an extension of their high street presence, and tie the two operations together much more effectively and ensure they’ve got a single view of the customer. They need to offer their customers the same product lines both in-store and online (so that customers who see an item of clothing they like can come into the store to try it on) and develop their ‘click and collect’ or ‘click and reserve’ systems so that they provide a seamless customer experience. Retailers should also look to interactive technologies, such as digital kiosks which customers can use to order products online if they’re not in stock in-store, to drive sales.

“While there is no silver bullet that will reverse the recent trends seen on the high street, it is clear that there are many in the industry that are thriving and adjusting to a new model of retailing. Those that do manage to adjust successfully, and banish the siloed approach to in-store and eCommerce, will no doubt set themselves up for future success and continue to grow.”