UK retail space is pretty vacant as coronavirus bites

The UK retail vacancy rate across all shopping locations was 12.2% in March 2020, an increase from 12.1% in December 2020, according to research by the BRC and LDC.

It was 12.3% for high streets (12.1% in Dec 19); 14.1% for shopping centres (14.4% in Dec 19); and 8.2% for retail parks (8.1% in Dec 19). Persistent vacancy rate - premises empty for two or more years – was 5.3%.

Helen Dickinson, Chief Executive at the British Retail Consortium, says: “For some time retail parks have been faring better than high streets and shopping centres as consumers took advantage of free parking and larger stores.”

“The coronavirus pandemic is likely to exacerbate this disparity as most retail parks include large supermarkets which have remained open to meet the public’s needs. Despite government support, it is likely that some stores may not be able to reopen after the lockdown is lifted, and the vacancy rate may rise sharply in the future as a result.”

With over three million retail jobs in the UK it is vital that as many firms as possible can start trading again once lockdown is lifted, she adds.

“While the government furlough scheme, loans and business rates holiday have provided an essential lifeline for thousands of retailers, stores continue to face fixed costs such as rent, which threaten their existence. To protect jobs and ensure the economy is able to get back on its feet in the coming months, it is vital that the follows the lead of other European countries and supports rents."

Lucy Stainton, Head of Retail and Strategic Partnerships at LDC, comments: “Given the pandemic, as well as the CVAs and administrations that have already taken place, plus the huge challenge to cash flow for all of the non-essential businesses forced to close, we are predicting that the vacancy rate will increase on a much steeper trajectory than originally anticipated this year.”

There is one bright spot, however. LDC data over the past few years reveals that the independent retail space has proven more resilient than chain retailing. “Might we expect to see the agility of these businesses, as well as a move to more localised shopping, continue to boost this sector, or will the onset of the financial challenges presented by Covid-19 overwhelm our independent retailers?” Stainton says.

“With independents currently representing 64% of the total UK retail landscape, the impact on this corner of the sector will be hugely influential to the overall health of our high streets.”