Glimmer of hope for shops as vacancy rate stabilises
Scotland’s struggling retail sector is seeing a glimmer of hope after figures showed there were fewer empty shops.
The vacancy rate fell to 16.1% in the last three months of last year from 16.4% in the previous quarter.
However, it is still 1.7 percentage points higher than in the same period in 2020 and one in six units remains vacant. Experts fear the adoption of hybrid working means there may never be a full recovery.
The problem remains particularly acute in shopping centres despite vacancies falling from 21.4% to 20.4%. This compares to high streets where 15% of shops are empty. Retail park vacancies fell from 13.4% to 12.6%.
David Lonsdale, director, Scottish Retail Consortium, said: “Scotland’s shop vacancy rate marginally improved in the final months of 2021 following six successive quarters of deterioration. It was a small, but nonetheless welcome, improvement aided by pop-ups and temporary lets deployed in the run up to the all-important festive trading period.
“That said, these figures offer few crumbs of comfort. Too many stores aren’t in use and the vacancy rate has remained above 16% for a third successive quarters. The volume of empty units is especially prominent in Scotland’s shopping centres.
“The fallout from the pandemic continues to exert a heavy toll on retail destinations, and a sustained shift towards hybrid working could make it trickier for store vacancy rates to ever fully recover.
“The extent to which retail remains the cornerstone of our town and city centres and can continue to employ almost a quarter of a million Scots will be influenced by decisions made by policy makers. With retailers’ revenues and shopper footfall continuing to fall short, more support is required.
“It is encouraging that several government reports are scheduled to be published soon – on city centre recovery, a town centres action plan, and a retail strategy. However, we cannot get away from the fact that one in every six retail premises is lying vacant, a visible reminder of why scrapping the cap on retailers’ business rates relief this Spring is absolutely vital.”
Lucy Stainton, director at the Local Data Company, said: “Vacancy rates are a strong barometer of the health of our high streets – with this in mind, it is very encouraging to see the increase in empty units finally stabilising after such a sharp rise over the past two years.
“This is the first real indication that the most significant structural impacts of the pandemic are potentially at their peak for certain regions, and operators, landlords and local government alike can start to rebuild after a particularly turbulent period.
“We are still seeing rationalisation across many of the chain retailers and leisure operators reflected in these latest statistics, but the growth in the number of independent businesses is helping stem further increases in vacant units.
“This is particularly key to note as having more independent operators alongside larger brands creates more diverse and entertaining spaces for consumers, which will further bolster attractiveness and therefore recovery.
“Landlords, and place-makers more generally, will need to closely consider how the needs and wants of local consumers might have changed post-pandemic, and align with operators who are active and meet their demands such that the first signs of recovery continue.”