Trouble ahead for retail vacancy rates, warns BRC

The British Retail Consortium (BRC) and Local Data Company has said the new BRC-LDC Vacancy Monitor has revealed that the rate of store vacancies increased to 12.2% in March. The monitor also reported a 0.3% decrease in vacancy rates in shopping centres to 14.1% compared with 14.4%. The South West and Wales saw the largest increases in vacancy rate, at 0.6% and 0.4% respectively. The North West saw the largest decline of 0.2%. BRC CEO Helen Dickinson said: “With over three million retail jobs in the UK it is vital that as many firms as possible can start trading again once lockdown is lifted. “While the government furlough scheme, loans and business rates holiday have provided an essential lifeline for thousands of retailers, stores continue to face fixed costs such as rent, which threaten their existence.” She added: “To protect jobs and ensure the economy is able to get back on its feet in the coming months, it is vital that the [UK] follows the lead of other European countries and supports rents.” Lucy Stainton, head of retail and strategic partnerships at LDC, said the data showed a “consistent increase” in the number of stores lying empty overall, which indicates that the UK now has “more retail space than is necessary to meet our changing consumer habits”. She said: “Given the pandemic, as well as the CVAs and administrations that have already taken place, plus the huge challenge to cash flow for all of the non-essential businesses forced to close, we are predicting that the vacancy rate will increase on a much steeper trajectory than originally anticipated this year. “However, LDC data over the past few years has revealed that the independent retail space has proven more resilient than chain retailing. Might we expect to see the agility of these businesses, as well as a move to more localised shopping, continue to boost this sector, or will the onset of the financial challenges presented by Covid-19 overwhelm our independent retailers?” She added: “With independents currently representing 64% of the total UK retail landscape, the impact on this corner of the sector will be hugely influential to the overall health of our high streets.”