Britain loses 6,000 stores in five years as BRC cites crippling business rates and impact of pandemic
The last five years have seen the closure of 6,000 stores in Britain, with the British Retail Consortium (BRC) pointing to unmanageable business rates and the impact of the pandemic as the main reasons for so many shuttering.
However, despite rising inflation and the cost-of-living crisis also taking their toll on beleaguered retailers and consumers alike, the latest rise in vacancies has not been as dramatic as perhaps assumed.
According to the BRC-LDC Vacancy Monitor, in Q2 2023 the overall vacancy rate increased to 13.9%, which was a 0.1 percentage point worse than Q1, but was a 0.1 percentage point better than the same period last year.
In Q2 2023, shopping centre vacancies remained unchanged at 17.8%, the same level as Q1. High street vacancies increased to 13.9%, 0.1% worse than Q1, while retail park vacancies fell to 8.1% in Q2, a 0.6 percentage point improvement from Q1 2023. Retail parks continue to remain the retail location with the lowest vacancy rate.
From a geographical perspective, Greater London, the South East and East of England had the lowest vacancy rates, while the highest rates were in the North East, followed by Wales and Scotland.
Helen Dickinson, CEO of the British Retail Consortium, said: "The past five years saw Britain lose 6,000 retail outlets, with crippling business rates and the impact of the COVID-19 lockdowns a key part of decisions to close stores and think twice about new openings.
"The North and Midlands continue to see the highest amount of empty storefronts. London’s vacancy rate remains the lowest, improving over the last quarter thanks to the opening of new flagship stores, more office workers and tourists visiting the capital.
"To inject more vibrancy into high streets and town centres, and prevent further store closures, the Government should review the broken business rates system. Currently, there's an additional £400 million going on retailers' bills next April, which will put a brake on the vital investment that our towns and cities so desperately need.
"The Government announcement earlier in the week about making changes of use to vacant units easier is welcome, but it’s important that local councils have a cohesive plan and don’t leave gap-toothed high streets that are no longer a customer destination, and risk becoming inviable. The Government should go one step further and freeze rates bills next year."
Lucy Stainton, Commercial Director at Local Data Company (LDC), added: "The headline findings from Q2 are unlikely to have come as a surprise to anyone, with economic pressure from rising interest rates and inflation already mounting as the year began. Current challenges to businesses have been compounded by tightening discretionary spend and a dip in confidence among consumers. The economic headwinds that have made the headlines have filtered into the data, reflected in a slight rise in the overall vacancy rate.
"The high street has seen some of the most notable impacts, with rising rents and increased competition putting pressure on small and independent businesses, who may struggle to meet high operating costs. Across all location types, vacancy has reached critical levels, highlighting an ever-increasing need to redevelop units to breathe life back into retail destinations.
"With the continuing trend in mind, we do not foresee any improvements to vacancy rate in future. However, given that the latest rises in vacancy have not been particularly significant, we anticipate that any increases in the near future will be gradual."