One in seven shops are now shuttered, a statistic that’s having a devastating impact on towns the length and breadth of the country. Covid has served to accelerate a trend that’s been in place for three-years and the latest British Retail Consortium report is calling for government intervention to mend the ‘broken’ business rates system as well as some creativity on the part of the property market.
The size of the challenge facing businesses on the high street has been put into sharp focus following the latest data-set published by the British Retail Consortium (BRC). According to the BRC and co-researchers the Local Data Company the overall GB vacancy rate for Q2 2021 increased to 14.5 percent, up from the Q1 figure of 14.1 percent. This continues a three-year trend of increasing vacancy rates and is 2.1 percentage points higher than at the same point last year.
Helen Dickinson OBE, Chief Executive of the British Retail Consortium, believes that it should come as no surprise that the number of shuttered stores in the UK continues to rise, after retailers have been in and out of lockdown for over a year. She said: “While vacancy rates are rising across all retail locations, it is shopping centres, with a high proportion of fashion retailers, that have been the hardest hit by the pandemic. Almost one in five shopping centre units now lie empty, and more than one in eight units have been empty for more than a year.” According to the BRC there is a pronounced regional contrast which is driven by levels of disposable income. The BRC data shows that London and the South East is experiencing lower vacancy rates, while the North, where disposable income is lower, continues to have a higher proportion of closed shops.
Looking to the future and the interventions that she believes are required of policy makers and politicians, Dickinson predicted: “The vacancy rate could rise further now the Covid-19 business rates holiday has come to an end. The Government must ensure the ongoing business rates review leads to reform of this broken system, delivering on its commitment to permanently reduce the cost burden to sustainable levels. The longer the current system persists, the more jobs losses and vacant shops we will see, hurting staff, customers and communities up and down the country.”
Lucy Stainton, Director of Local Data Company, confirmed: “Vacancy now sits at the highest rate ever recorded by the Local Data Company. With appetite for new space increasing but still modest, there will simply never be enough demand to meet the supply. The property market will be forced to think of more creative ways to utilise this space, to avoid exacerbating the already high rates of long-term voids across our retail destinations which are not only unsightly and costly for landlords, but also have a negative impact on surrounding stores.”
“After an initial flurry of CVAs, closures due to consumer behaviour shifts and cost-cutting exercises, retailers are now starting to dust themselves off with cautious optimism, keeping a close eye on the rapidly changing infection rate and the pace at which vaccinations are taking place; two measures that could seriously de-rail recovery efforts should they not go in the right direction.”
Changing dynamics on the high street bring new opportunity, but ‘age-old stigma’ remains a challenge
PAUL HYMAN CHIEF OPERATING OFFICER LUXURY LEISURE TALARIUS
“There is no doubt the landscape on our High Streets have changed as result of Covid. As always there are pros and cons, however, the overall result for us is positive.
While footfall has not fully recovered in large towns and city centres, the opposite can be said in smaller towns.
We have seen more independent retailers enter the market (at the cost of many national chains), although many premises remain unoccupied.
We are taking advantage of this, and relish the opportunity to expand our footprint. We have worked very hard to become a destination business, as you cannot rely on retail shopping alone, as a driver of footfall in to our AGC’s.
We might expect the use of the High Street to change further over the coming years, in too much more of a mixed use including a greater presence of leisure & hospitality businesses.
Planning & Licencing remain challenging due to the age old ignorance and stigma, however, we remain optimistic given the essential work we are collectively doing to improve our PR, including the vital MP and DCMS visits to our locations across the UK.”
“It is the time to address some of the structural issues that are holding the high street back”
JOHN WHITE CHIEF EXECUTIVE BACTA
“There is no doubt the High Street has felt the impact of Covid-19 more than most. From shops to hospitality to venues to High Street Adult Gaming Centres the lockdowns, the non-sensical restrictions and the on-going concerns of customers have felt like punch after punch to the solar plexus, with government support, welcome as it was, merely acting as an analgesic.
With the countries of the UK now looking forward, it is the time to address some of the structural issues that are holding the High Street back. Not least amongst these – business rates.
Bacta has contributed to the debate calling for wholesale reform of a system which does not reflect the success or failure of a business and in fact contributes to the demise of many.
High Street AGCs bring welcome vibrancy, character and entertainment to many a denuded High Street. The top drawer service and luxury level livery of most High Street AGCs brings a new dimension to the whole High Street offer and business rates and the regulatory constraints to which they are subject, should in Bacta’s view, be based upon appropriate support for the business not its control.
It is why in our submission to the Gambling Review we have proposed a series of enhancements to what we can offer to our customer’s ranging from innovative new machines to new community features.”
“We need an imaginative and joined-up approach” which includes a “root and branch review of business rates”
SASCHA BLODAU GENERAL MANAGER MERKUR UK
“When we host constituency MPs in our venues two topics are guaranteed to come up in conversation. The first revolves around the extensive safer gambling commitments that we are delivering courtesy of the MERKUR 360 Program and the other is about the contributions that we are making to the local economy and in the process helping to sustain the high street.
There’s no doubt that Covid has accelerated a trend that was already firmly in place and the Government has recognised the importance of addressing the decline through its £830m Future High Street fund and its Levelling Up fund which will see £4.8bn for town centre and high street regeneration.
It’s in everyone’s interests to have a healthy, vibrant and economically active high street. High Streets are the heart-beat of every town in the country and the industry’s established consumer facing brands such as MERKUR Slots and MERKUR Bingo are making a substantial contribution to high street economies, employing local people and supporting local supply chains. These are compelling arguments and ones which resonate with MPs.
Moving forward, I would like to see an imaginative and joined-up approach which includes a root and branch review of business rates as well as an overhaul of public transport services to encourage visitation and high street footfall.”
“New business and commerce attract new business and commerce, it’s not rocket science. It’s time that all Local Authorities woke up….”
PETER HANNIBAL CHIEF EXECUTIVE GAMBLING BUSINESS GROUP
“Gambling Business Group members are bucking the trend and investing in the high street. Indeed, without what is a significant commitment from the land-based sector Britain’s high streets would be in an even more parlous state.
The simple facts are that responsible retail gambling is good for jobs, good for maintaining social interaction and an essential contributor to local economies.
It is disappointing to see that some Local Authorities still can’t see past their prejudicial views of gambling entertainment when they are processing planning applications.
All of the objections that are being used against approvals of new Licenced Gambling Premises are lacking in evidence and are subsequently proved to be unfounded.
New business and commerce attract new business and commerce, it’s not rocket science. It’s time that all Local Authorities woke up and started to welcome and embrace the investment offered by responsible and respectable gambling operators in their local areas.
Challenges such as this can sometimes create opportunities and the repurposing of commercial high street properties to desperately needed residential, might just be the catalyst for a new mixed use high street in which leisure and entertainment are central to the core proposition.”