The pandemic continues to hit retail as the vacancy rate of shops across the country has increased to 14.1%, the latest British Retail Consortium shop vacancy monitor has revealed
One in seven shops are now vacant with shopping centres faring worse than other retail locations, with over 12% of units lying empty for a year or more. In figures reported by the Local Data Company (LDC) in March, more than 17,500 chain store outlets disappeared from high streets, shopping centres and retail parks across the UK with 48 shutting permanently every day.
In the first quarter of 2021, the overall shop vacancy rate increased to 14.1%, from 13.7% in Q4 2020, 1.9% higher than in the same point in 2020 with these figures marking three years of increasing vacancy rates from Q1 2018.
In regional terms, vacancies in the north east stood at the highest level overall, up to 19.3% compared with 18.8% the previous quarter and 16.7% during the same period the previous year.
On a quarterly basis, the West Midlands registered the sharpest increase in its vacancy rate, from 15.6% at the end of 2020 to 16.9% at the end of Q1 2021 and Greater London vacancy rates were flat at 10.7%.
Helen Dickinson OBE, chief executive of the British Retail Consortium, said: ‘After a third national lockdown, it is no surprise that the vacancy rate has continued to soar. The forced closure of thousands of shops during the first quarter of 2021 has exacerbated already difficult conditions for the retail industry.
‘With full business rates relief and the moratorium on aggressive debt enforcement ending in England this summer, many stores may never reopen. The government must ensure the ongoing business rates review leads to reform of the broken system and permanently reduces the cost burden which is leading to unnecessary stores closures and job losses.
‘The number of vacant units has continued to increase in the first three months of this year across the country, despite much of the market being temporarily closed during the third lockdown.
‘With this in mind, and despite these percentages increasing significantly, we would argue that we have not yet seen the true impact of this third lockdown and this will only be obvious once the market has had the chance to re-open fully. We have seen a number of household names announcing further store closures or indeed, disappearing from our high streets entirely showing how challenged physical retail continues to be.’
In the Budget on 3 March, the government stated that they will continue to provide eligible retail, hospitality and leisure properties in England with 100% business rates relief from 1 April 2021 to 30 June 2021. This will then be followed by 66% business rates relief for the period from 1 July 2021 to 31 March 2022, capped at £2m per business for properties that were required to be closed on 5 January 2021. The 100% relief rates in Scotland will be available until at least 31 March 2022.
Lucy Stainton, director of retail and strategic partnerships, Local Data Company, said: ‘The early indications from the first few weeks of the unlocking have shown there is still significant demand for physical retail and eating out.
‘Hopefully, as consumer confidence continues to build momentum with reduced covid-19 cases, more of the population vaccinated and warmer weather, further fall out from the pandemic might be mitigated somewhat. Similarly we are seeing a lot of redevelopment with retail stores being converted to other uses such as office space and residential property. This too may help stabilise the increase in vacancy we would otherwise expect to see continue into Q2.’
In figures published today by the Insolvency Service, there were 2,384 seasonally adjusted corporate insolvencies in Q1 2021 which is a reduction of 21.9% compared to Q4 2020’s figures of 3,053.
The shop vacancy monitor report is prepared by London Data Company for the British Retail Consortium.