New shop openings and demolitions lead to a dip in vacancy rate for most outlets in March but decline continues for non-food stores and multiples.
Shop numbers grew for the sixth consecutive month in March, according to the latest figures from the Local Data Company (LDC), with openings rising faster than closures, and a nine-month high of demolitions reducing the overall number of vacant units. However, this positive activity was not reflected in comparison outlets (non-food goods), which slid back into decline.
The Retail Vacancy rate fell – reaching 12%, down from the historic high of 14.6%, and reversing a five-month decline from autumn last year. The LDC Growth Index shows that, while shop openings and closures have both kicked upwards, net gains in the number of shops operating have been recorded across each of the last six months. This trend promises to make up for the losses of the first three quarters of 2016.
All types of outlet – convenience, service and leisure – continued to show growth, however, after a brief rise above zero in February, the net decline of comparison (non-food goods) shops was re-established. This reflects long term trends in which 9,490 product-based shops closed, net, in the five years 2012-2016. Losses there are being offset largely by gains in service and leisure outlets, as the complexion of our retail locations continues to change, says the LDC.
Independents hit a 12-month high with a net gain of 385 shops, but multiples dropped back to zero net growth across all categories, continuing to shutter comparison and service units - most notably bank branches - whilst driving ahead with leisure openings.
All of the three main location types, town centres, shopping centres and retail parks, remained in growth. The LDC added that, while the gains in towns are more impressive for their numbers, the steady long-term gains in small numbers of stores in retail parks mask a far bigger gain in selling space, as outlets on retail parks are on average more than 13 times bigger than shops.
LDC director Matthew Hopkinson, Director at LDC commented: “Perspective is all. The vacancy rates are gently moderating, which will be welcome, yet over the past six years the improvement has been such that one in eight shops is now empty, as opposed to one in seven at the peak.
“Rising net openings in towns and among independents are providing the big numbers in the story, but looking at the floor space being brought into use in retail parks, we can see that space out of town is being brought into use at a much greater rate than on our high streets. A small number of big shops can make as much or more of a difference to a location than a large number of small shops – and the key issue is where consumers choose to spend their money.”
He added: “Both vacancy and openings and closures remind us that improvement and decline lie either side of a very fine line. Rising levels of activity are encouraging, but it is the balance that determines the outcome.”