Retail in the UK is in a dire state as the number of vacant stores continues to rise. Despite the recent reopening of non-essential retail in England, Wales, and Scotland after lockdowns, it is expected that more stores will be forced to shut down in the coming months. To alleviate the financial burden on retailers, the British Retail Consortium (BRC) is calling for an extension of the business rates holiday until 2022. The BRC has reported that over 5,000 stores have already closed due to the ongoing COVID-19 crisis.
Data collected by the Local Data Company (LDC) for the BRC reveals that the overall vacancy rate in the UK increased to 14.1% in the first quarter of 2021, up from 13.7% in the previous quarter. Although the rise in vacancy rates has been a consistent trend over the past three years, the pandemic has exacerbated the problem.
Shopping centers have been hit the hardest, experiencing a rise in vacancy rates from 17.1% to 18.4%. High streets saw a slight increase from 13.7% to 14.1%, while retail park vacancies rose marginally from 10% to 10.6%. The northeast of England has the highest vacancy rate at 19.3%, closely followed by Wales (19.1%), the Northwest (17.7%), and the Southeast (12.7%). Greater London has been the least affected, but still witnessed an increase from 8.9% to 10.7% over the year.
With the current business rates holiday scheduled to end in June, the BRC is stressing the need for a permanent reduction in costs to safeguard the remaining stores and jobs. Helen Dickinson, Chief Executive of the BRC, has expressed concern about the devastating impact of forced closures during the first quarter of 2021, which has only worsened the already challenging situation for the retail industry. Dickinson also fears that many stores may never reopen, especially with the impending end of business rates relief and the relaxation of aggressive debt enforcement in England.
Lucy Stainton, Director at the Local Data Company, has underlined that the full extent of the third lockdown’s impact is yet to be seen. Several well-known retailers have already announced further store closures or are vanishing from high streets altogether, illustrating the ongoing struggle faced by brick-and-mortar retail.
The future of retail in the UK hangs in the balance, necessitating swift action to prevent further store closures and job losses. Extending the business rates holiday and implementing permanent cost reductions are crucial measures to support struggling retailers and protect the industry. Without intervention, the retail landscape in the UK could undergo irreversible changes.
Useful links:
1. British Retail Consortium Media Centre
2. Local Data Company Official Website
