Published on February 10th, 2021 | by The GC Team0
“Zombie stores will haunt UK High Streets this year”
- Hundreds of thousands of stores struck by changing restrictions
- “Frozen” units less likely to reopen
- Compound effect of each lockdown predicted to be visible in later vacancy figures
- “Horror story” for High Street as many of Britain’s favourite retail brands “rescued” by e-commerce giants
- Government support needed to avoid unnecessary shop closures and the loss of tens of thousands of jobs
The British Retail Consortium has warned that the number of shop vacancies will continue to rise if the Government does not step up and support retailers, after a recent report showed the vacancy rate in the fourth quarter of 2020 rose for the tenth consecutive quarter.
The news comes as some of the UK’s biggest fashion retail names owned by Sir Philip Green’s failed Arcadia Group and the 240-year-old store chain Debenhams have been abandoned to e-commerce giants ASOS and Boohoo.
With the pandemic and enforced restrictions on retail driving consumers online and accelerating the existing problems faced by bricks & mortar retailing, shop vacancies increased from 13.2% in Q3 to 13.7% in Q4 – 1.6 percentage points higher than the same point in 2019.
All locations saw an increase, with Shopping Centre vacancies increasing to 17.1% from Q3’s 16.3%, High Street vacancies increasing to 13.7% – up from 13.3% and remaining in line with the overall rate – and Retail Park vacancies rising to 10.0% from 9.2%, but remaining the location with by far the lowest rate.
Lucy Stainton, Head of Retail and Strategic Partnerships at the Local Data Company, said while the figures clearly show the predicted acceleration in units closing, the catalyst of which being the COVID-19 pandemic, these numbers only reflect the very immediate impact of the pandemic on the retail market.
“Hundreds of thousands of stores have been struck by changing restrictions and many of these remained temporarily closed in the intervening periods between lockdowns.
“Therefore, these businesses are not reflected in the permanent vacancy figures. With each round of restrictions, these ‘frozen’ units are less likely to reopen and so we’re predicting the compound effect of each lockdown being visible in later figures.”
“It’s a horror story for Britain’s High Street,” said e-commerce delivery expert ParcelHero, warning that “zombie” stores will haunt UK High Streets this year.
Over the last few weeks, many of Britain’s former favourite retail brands – names such as Topshop, Topman, Miss Selfridge and Debenhams – have been “rescued” by e-commerce giants Boohoo and ASOS, which have bought only the brands and online businesses.
“Those physical shops whose stock was not bought as part of the takeovers will be left to wind down, effectively feeding off other High Street shops by undercutting them to clear stocks before their final closures,” said ParcelHero’s Head of Consumer Research David Jinks MILT.
“Over 560 stores will eventually close as their brands move online only. Even when this wave of closures is over, don’t be lulled into a false sense of security. Other big High Street names are also being snapped up by online-only retailers.”
Helen Dickinson, Chief Executive of the British Retail Consortium, said: “Over the past two years one in every 50 outlets has permanently closed, and this number will only go up.
“With the country in and out of lockdown, the forced closures of thousands of shops, and consumers reluctant to visit town and city centres, it is unsurprising that the number of shuttered stores continues to rise.
“If Government wants to avoid unnecessary shop closures and the loss of tens of thousands of jobs, it must urgently extend the business rates relief beyond April, providing additional targeted financial support to the hardest hit retailers, and extend the moratorium of aggressive debt enforcement.
“Without these interventions, not only will retail firms go under, but the vibrancy of our town centres and local communities across the country will be lost.”