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Chancellor urged to boost household income to help Britain’s struggling high streets

GyleChancellor George Osborne is being urged to put more money in people’s pockets in order to boost spending power and give the struggling high street a much-needed lift.

Footfall is down on a year ago and one in ten shops is vacant, a figure that is likely to rise significantly as a huge swathe of leases come up for renewal, according to new data.

Cost-conscious shoppers are being drawn increasingly online or to Scotland’s out-of-town shopping centres at the expense of high streets.

The data from the British Retail Consortium and the customer monitoring services Springboard shows margins being clipped and is likely to prompt further demands from town centre retailers for help towards easing costs, better car parking and other measures that will improve the shopping experience.

Shopper numbers in January were down 3% on this time last year and by 6.9% in the high street, while out of town centres saw a 1.5% uplift. The vacancy rate in Scotland was 9.7%, compared with 9% in the previous quarter, although this is better than for the UK which is 10.4%.

David Lonsdale, Director of the Scottish Retail Consortium, said: “We’ve grown accustomed in Scotland in recent months to encouraging trends on shopper footfall and retail vacancies and so hopefully these figures will prove to be only a temporary blip. The shop vacancy rate in Scotland continues to be lower than across the UK as a whole, however almost one in every ten retail premises is empty.

“The industry continues to undergo profound structural change and this is testing the business model of every retailer. Ultimately though the health of the sector will be affected by state of the overall economy, which is why we look to the Chancellor’s Budget next month and the upcoming UK General Election for measures which will increase consumer confidence, boost disposable incomes and encourage retailers to invest.”

Diane Wehrle, Retail Insights Director at Springboard, said: “This is the first drop in footfall in Scotland for seven months and is largely accounted for by a significant 6.9% drop in high streets.

“As it did for virtually all of 2014, footfall continued to increase in out-of-town locations in January and, whilst footfall dropped in shopping centres for the fifth month in a row, the drop of 1% was the most modest decline for the last five months.”

Ms Wehrle said the reasons behind the trends were clear and the pressures on the high street would continue.

“Despite the fact that high streets and shopping centres still account for the majority of our shopping floor space, the on-going strengthening of out-of-town locations is clear evidence that urban shopping locations are losing market share.

“Without doubt this is due to both the challenge of the internet and the convenience of out-of-town locations for click-and-collect as they offer plentiful, accessible parking that is free of charge.  Despite this, it is good news that at 9.7 per cent the vacancy rate is lower than the UK rate of 10.4 per cent, although it has increased from 9 per cent over the last quarter.

“This, in combination with the fact a significant number of retail leases are due to expire over this year suggests that this could rise further in the coming months – particularly as consumers are now demanding discounts, which squeeze margins and adversely impact profitability and long term business sustainability.”

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