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More shoppers on high street – but more shops empty

David Lonsdale seriousOne in eleven shops in Scotland’s high streets is empty, higher than the rest of the UK, and retail leaders say concern over business rates is now “mission critical”.

A further rise in rates due on some premises in April will only make the situation worse, says David Lonsdale (pictured), director of the Scottish Retail Consortium.

The rise in the number of empty properties emerged in spite of more shoppers hitting the high street.

Footfall numbers in Scotland were 1.5% higher in January than a year ago, better than the 0.2% rise in December. This is the best performance since March 2015 and is ahead of the UK average of 1.2%

However, the vacancy rate in Scotland was 9.1% in January, up from 8.7% in the previous quarter.

Mr Lonsdale said: “This second successive month of growth in shopper footfall is encouraging, and may point to a more positive start to the year for retailers after what was a decidedly downbeat 2015 as a whole for the industry in Scotland.

“This is the best footfall performance since last March, ahead of the three-month average and with Scotland marginally outperforming the UK as a whole.

“By contrast however, the deterioration in the shop vacancy rate is less welcome. One in every eleven shops in our town centres is empty, higher than the comparable figure for the UK.

“There is no more pressing issue for the industry than the prohibitive cost of business rates, which has moved in the eyes of many retailers from an irritation to mission critical in recent years.

Princes St shopping“The further across the board rates rise due in April, coupled with the extra £60 million rates surcharge set to be levied on retailers and others operating from medium sized and larger premises, only compounds the burden.

“The Scottish Government’s promise to fundamentally review the tax this summer heralds a crucial opportunity to recast business rates and reduce the burden for the decades ahead.”

Diane Wehrle, marketing and insights director at Springboard, said: “Footfall increased in all types of retail destinations across the UK, and whilst in Scotland footfall in shopping centres declined by 3.3%, the overall result of 1.5% was the best since March 2015 driven by a rise of 3% in the high street.

“Tracking footfall since 2009 has shown that it is the post 5pm period that has been most resilient, with improvements in daytime footfall following an increase in activity in the evening.

“Alongside footfall, spending across the UK rose in January led by furniture and hospitality which potentially has longer term benefits by increasing shoppers’ awareness of store offerings and driving up spend through longer dwell times and the “family effect” whereby the family shopping group typically increases transactions values.

“Whilst the vacancy rate across the UK improved, in Scotland it rose from 8.7% to 9.1%.  Evidence shows the driving force in the drop in vacancies across the UK to be an increase in pop-ups and temporary lets in the run up to Christmas and which are still occupied.

“It seems that Scotland’s retail destinations are lagging behind in the demand from occupiers for space which is a challenge moving forward into 2016.”

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