One in six shops empty amid new calls for action
Shop vacancies on Princes Street (pic: Terry Murden)
One in six shops are now vacant in Scotland and shopping centre across the UK are seeing around 20%, or one in five units unoccupied.
Retail parks have also been impacted from the loss of anchor stores and their vacancy rate is rising quickly.
The figures prompted retail leaders to renew calls for action to reduce costs, including drastic reform of the business rates system, and warn of an even higher toll of casualties as financial support is withdrawn.
The vacancy rate in Scotland in the second quarter of 2021 rose to 16.1% from 15.3% and is now at a six-year high, up by a quarter over the past year. Shopping Centre vacancies increased to 21.5% from Q1’s 20.1%.
The figures coincide with the opening of the £1 billion St James Quarter in Edinburgh. Despite attracting a line-up of top brands, including some new to Scotland, there is concern that it may struggle to be fully occupied.
Commenting on the vacancy ate, David Lonsdale, director of the Scottish Retail Consortium said “it is far from clear that it has reached its apogee”.
He added: “The deterioration affected all destinations, with shopping centres faring especially poorly and retail parks once again performing relatively better.
“It is encouraging that two big government reports are scheduled to be published soon – on city centre recovery and on a town centres action plan. The measures which result cannot come soon enough.”
Mr Lonsdale called for Scotland to follow the example of Northern Ireland which has announced that its £145 million high street stimulus scheme – giving £100 to each adult in NI to spend on high streets – will come into effect in September.
The Scottish Retail Consortium has called for a similar retail voucher or high street stimulus scheme for Scotland. Its submission to the Scottish Budget noted that Jersey and Malta had introduced similar schemes.
The Scottish vacancy figures are higher than the overall GB rate which increased to 14.5%, from 14.1% in Q1 – marking three years of increasing vacancy rates from Q1 2018. Shopping Centre vacancies across GB increased to 19.4% from Q1’s 18.4%.
Northeast England has the most empty shops with the vacancy rate at one in five (20.6%).
David Lonsdale: Scotland needs to emulate Northern Ireland scheme (pic: Terry Murden)
Helen Dickinson, chief executive of the British Retail Consortium, said: “It comes 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.
“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 lies empty, and more than one in eight units has been empty for more than a year. Retail parks have also been impacted from the loss of anchor stores and their vacancy rate is rising quickly.”
In England there is concern that the business rates holiday is about to end, while the Scottish Government has extended the relief to the end of the financial year next April.
Ms Dickinson said: “The [UK] 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, which compiled the figures, offered some hope that the reopening of the economy will see some stability.
She said: “Like the pandemic, there is hope that we are over the worst. 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.”
However, she warned that with appetite for new space increasing but still modest “there will simply never be enough demand to meet the supply.”
She added: “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.”