UK store vacancies still higher than pre-Covid, rates rise creates risk
Holding steady... for now. That's the UK’s store vacancy rate, which stood at 13.9% in the third quarter of 2022. But while the overall store vacancy rate improved marginally for the fourth consecutive quarter, vacancies are still higher than pre-pandemic levels and concerns remain as the economic climate worsens, a joint report from the British Retail Consortium (BRC) and the Local Data Company (LDC) shows.
High street vacancies fell slightly to 13.9% quarter-on-quarter, shopping centres dipped 0.1% to 18.8% and retail parks remained at 9.7%, the location continuing to show the lowest vacancy rates,
The latest BRC-LDC vacancy monitor showed that London, the South East and East of England had the lowest vacancy rates, “with some locations benefiting from a pick-up in tourism and a gradual return to offices… [giving] some businesses the confidence to start investing, opening new stores around the country, especially in retail parks,” Helen Dickinson, chief executive of the BRC said.
But the highest vacancy rates were in the North East, followed by Wales and the West Midlands, “with the North-South divide again laid bare in these figures,” Dickinson added.
“While the North has seen some of the biggest improvements in openings over the last year, they still have some of the highest vacancy rates in the country, with one in five shops closed in the North East.”
She added: “The cost of operating in many towns and cities remains high and demand will be tested by the fragile economy and falling consumer confidence in the lead up to Christmas. Higher costs are already pushing up prices and the industry faces a government-imposed extra £800 million business rates bill from April 2023.”
Lucy Stainton, Commercial Director for LDC, added: “Independent businesses in particular have continued to flourish as consumers remain loyal to their local high streets. However, we can’t ignore oncoming economic pressures as consumers face a winter of increased caution and reduced disposable income.
"Just as the market has started to find its feet, we are now about to face a new round of tests -- but perhaps the lessons learned during the pandemic will help chains and independents to weather the coming storm. The latest GB figures are encouraging but should still be viewed with real caution, and we would predict that this increase in occupancy could slow as retail and hospitality businesses grapple with a tough winter.”
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