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Vacancy rate hits four-year low, as high street footfall drops

Published: 12 August 2019 - Fiona Garcia
 

The latest figures from Springboard reveal, at 10.3%, the town centre vacancy rate in July was the highest since January 2015, whilst the high street recorded a 2.7% decline in footfall for the month.

Shopping centres experienced the biggest fall in footfall, down 3.1% in July and high streets recorded a three-month average decline of 4%. Meanwhile, retail parks were the only location to report an uplift in footfall, with shopper numbers up 1.2% last month.

It follows news that July saw lowest retail sales growth on record, according to the British Retail Consortium ( BRC) as slow wage growth and consumers who remain “disengaged” in the face of Brexit uncertainty resulted in both physical and online non-food stores struggling. The pressure on retail outlets from declining footfall and lacklustre sales is reflected in the town centre vacancy rate, which continues to climb.

BRC chief executive Helen Dickinson OBE 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.”

Springboard marketing and insights director Diane Wehrle explained: “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 … 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.

She concluded: “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.”

Ms Dickinson believesthe solution lies with the Government, stating if they wish “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.”
She continues: “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.”

 

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