RETAIL ENVIRONMENT
Extent of empty shop fronts revealed
New figures released by local councils have revealed that 15.9 per cent of all shops in the UK now lie empty.
Data obtained by Duff & Phelps via a Freedom of Information request showed that with a total of 418 councils in the UK, a mean average indicates that the total number of vacant retail units stands at 50,578 – or an average of 121 empty retail units per council.
According to the Office for National Statistics, there were 319,000 retail businesses in the UK in 2018. Given this figure, it is believed that the void rate now stands at just under 16 per cent of the total.
Philip Duffy, managing director of restructuring advisory at Duff & Phelps, said that the impact of the problem for local government cannot be underestimated, with empty units leading to lost rental and business rates income.
“The old financial model of the traditional brick and mortar retailer - based on a high street or shopping centre built around them in the post war era - was centred on regular increases in sales and 25-year leases with upward rent reviews only,” he explained, pointing out that this has meant high rents and occupancy costs.
“This has blown apart as a result of both the discounters and the dramatic uptake in online sales – the remaining question is whether this picture continues throughout 2019 and if so, at what speed?”
Research has showed that since 2010 more than 20,000 shops have ‘disappeared’ from the high streets and the communities that they once served.
This followed on from the latest BRC report on empty frontages, which found the national town centre vacancy rate to be 10.2 per cent in April, up from the previous quarter's rate of 9.9 per cent - the highest since April 2015.
