Published on May 13th, 2019 | by The GC Team0
Shop closures up, footfall down
The national town centre vacancy rate rose to its highest since April 2015 after a swathe of high-profile retail failures and portfolio downsizing since the start of the year.
According to the British Retail Consortium, the vacancy rate increased to 10.2%, up from 9.9% in the previous quarter and the highest for four years.
Retail footfall, meanwhile, declined in April, in spite of a healthy rise over the Easter holiday, particularly for the high street.
Shopper numbers fell by 0.5% on last year, with retail parks the only winners. The sector recorded a rise of 2.2%, while shopping centre footfall fell 2.1% and high streets suffered a 1.0% decline.
BRC Chief Executive Helen Dickinson pointed out that empty shopfronts, particularly larger stores, can deter shoppers from an area, decreasing footfall for all those around. And the effect can be cyclical, with the long-term decline in footfall pushing up vacancy rates, particularly in poorer areas.
But she added that the cumulative impact of Government policy costs – from spiralling Business Rates to the Apprenticeship Levy and more – have also made physical space less cost effective.
“For many retailers, business rates remain the single biggest tax imposed by Government. They are a levy on physical space that is paid in full regardless of whether a firm is in profit or in loss.
“Importantly, they are also borne disproportionately by retailers who represent 5% of the economy yet pay 25% of all business rates. If the Government is serious about reversing the decline on our high streets, then reforming the broken Business Rates system would be an essential first step.”