Coronavirus accelerates retail change and eats away at stores

The coronavirus outbreak is beginning to push up UK retail site vacancy rates, albeit at a modest rate, according to research from the BRC and The Local Data Company.

In the second quarter of 2020, the overall GB vacancy rate increased to 12.4%, from 12.2% in Q1.

The situation would be much worse if not for government support allowing many locations to survive. However, the full effects of the pandemic are yet to be seen, with government slowly withdrawing the relief that substantially reduced costs over the last period, the BRC observes.

How many stores are left standing will depend on how demand recovers going forward and the rise in vacancy rates is just the beginning.

“Retail parks continued to fare better than high streets and shopping centres due to their extra space, on-site parking, and broader mix of food and non-food retailers, but this was still not enough to prevent a slight increase in vacancy rate,” says BRC Chief Executive Helen Dickinson.

Covid has accelerated many of the changes in retailing already underway, she argues. Online continues to grow and retail stores should also have a vital role in our communities, supporting jobs and other businesses which rely on retail footfall. The shuttering of too many shops on our high streets will threaten the vibrancy of town centres, and damage local economies.

“With many months of rent having built up during lockdown, the government must ensure local stores are not shouldered with unpayable debts. Without action, there will be unprecedented retail and business failures, job losses and knock on consequences for highly geared property owners,” Dickinson concludes.