UK store vacancy rates drop, but rising costs put retailers at risk

A new report by the British Retail Consortium (BRC) has found that overall UK store vacancy rates had decreased to 13.9 percent in Q3, however it warned that rising business costs could put retailers at risk.

In its report, the organisation said for this quarter there was a 0.1 percent improvement compared to the last, as Great Britain begins to move into its fourth consecutive quarter of falling vacancy rates.

All locations had seen improvements according to the report, including shopping centres, in which vacancies fell to 18.8 percent.

High streets saw a 13.9 percent drop, while retail park vacancies decreased to 9.7 percent, making it the retail location with the lowest rate.

Geographically, the highest rates were recorded in the North East, with one in five shops closed in the region, followed by Wales and the West Midlands.

Meanwhile, London, South East and East of England had the lowest vacancy rates, with independent businesses having flourished in particular.

Retailers face extra 800 million pound business rates bill from April 2023

Despite this, the BRC’s chief executive Helen Dickinson noted that higher business costs in combination with declining consumer confidence could be putting retailers at risk.

On the vacancy rates, Dickinson said that some locations were benefiting from a rise in tourism and a return to offices, but levels of footfall were still below those of 2019.

She added: “Higher costs are already pushing up prices and the industry faces a government imposed extra 800 million pound business rates bill from April 2023.

“This will force many retailers to make tough decisions about whether to invest in new stores or close existing ones.”

Dickinson went on to suggest that the government needed to freeze business rates and reform the “broken transitional relief system” in order to support investment in communities.

In a release, Lucy Stainton, commercial director of Local Data Company, which aided the BRC in the report, seconded Dickinson’s concerns, noting that oncoming economic pressures could cause a slippery slope for retailers during winter.

Stainton continued: “Just as the market has started to find its feet, we are now about to face a new round of tests – but perhaps the lessons learned during the pandemic will help chains and independents to weather the coming storm.

“The latest Great Britain figures are encouraging but should still be viewed with real caution, and we would predict that this increase in occupancy could slow as retail and hospitality businesses grapple with a tough winter.”