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BRC: Shop vacancy rates rise above 10%

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The BRC has reported that UK shop vacancy rates rise above 10%.

Over the four weeks 03 July- 30 July 2016, the BRC says that:

- Footfall in July was 0.4 per cent down on a year ago, better than the 2.8 per cent fall in June.
- The national town centre vacancy rate was 10.1 per cent in July 2016, up from 9.6 per cent in April 2016.
- High street footfall increased for the second time in three months, up 0.3 per cent in July, better than the 3.7 per cent fall in June.
- Footfall in retail park locations decreased for the second consecutive month, down 0.3 per cent year-on-year.
- Footfall in Shopping Centres continued to decline, falling 2.0 per cent in July, up on the 2.3 per cent decline in June.

Helen Dickinson OBE, Chief Executive, British Retail Consortium, said:

"Today's figures remain lacklustre with total footfall down again, this month by 0.4 percent. Retailers will have taken comfort from the fact that recent BRC figures show that total sales grew over the same period. Given the decline in footfall is slowing and High Street locations actually reported an increase in shopper numbers of 0.3 percent, some retailers in some locations may have some reasons to be cheerful.

"Of greater cause for concern is the rise in shop vacancy rates to 10.1 percent. The increase in the number of empty shops is an unwelcome reminder of the heavy burden of property costs. After a long run of shop vacancies being below 10 percent, seeing them rise over that threshold once again will be a bitter disappointment to many.

"The retail industry is undergoing a transformation driven by technology which is changing the way we shop. Shoppers are demanding more a personalised service and a seamless interaction between physical and digital. With UK property taxes higher than anywhere else in the developed world they act as a disincentive to operate physical space. Today's figures should serve as a wake-up call. If property costs in general, and business rates in particular, continue ever upwards, we should all be concerned about the impact on our local communities up and down the country."

Diane Wehrle, Marketing and Insights Director, Springboard, said:

"July saw a break in the clouds in some retail areas, with better weather and strong end of sale discounting of up to 70 per cent off helping to improve high street footfall which was up 0.3 per cent, following a disappointing drop of 3.7 per cent in June. Some high streets in London and other major cities saw the changes in exchange rates produce increased spend from overseas visitors who could get incredible value with seasonal sales and strong exchange rates providing an unbeatable shopping offer. However, after 29 months of consecutive growth in footfall for out of town locations up until May this year, July followed June's pattern of a slight footfall decline of 0.3 per cent and shopping centres were down by 2 per cent."

"The UK vacancy rate rose over the quarter to July by 0.5 percentage points to 10.1 per cent, from 9.6 per cent in April for the previous quarter. This is the highest vacancy rate since April 2015, after which the rate remained below 10 per cent. The April to June quarter can prove irregular, as post-Christmas pop ups and temporary stores disappear from the high street and the EU Referendum and political and economic uncertainty of the last quarter will have deterred some retailers from taking on leases. The next quarter's figures will be the ones to watch to get a clear picture on any continued increase in vacancy rates, which would be concerning for town centres across the UK."

Image: (C) arenaphotouk / adobestock.com

Source : British Retail Consortium
www.brc.org.uk

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17 August 2016

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