Coronavirus Effects Already Pushing Vacancies Up
Helen Dickinson OBE, Chief Executive, British Retail Consortium:
“With a second wave of the pandemic underway, we have seen a record increase in the number of shuttered shops. Shopping centres fared the worst among retail sites due to the higher proportion of fashion outlets, where consumer demand has been hit hardest. The uncertain climate has also meant that even those looking to expand are holding off making investments in new stores. As a result, we expect to see the retail vacancy rate continue to rise.
“The Government’s business rates holiday has mitigated some of the impact of the pandemic on shop vacancies and local communities. If retailers see a return of 100% business rates next April, the consequences will be severe; the Government should ensure that rates bills reflect current market reality by continuing a level discount at 50%, thereby creating a more sustainable cost base for businesses so they can continue to trade and invest in recovery and longer term growth. Without this, there will be unnecessary store closures and the loss of thousands of otherwise viable jobs.”
Lucy Stainton, Head of Retail and Strategic Partnerships, Local Data Company:
“The sharp increase in the vacancy rate in Q3 is illustrative of the immediate impact the coronavirus pandemic is having on retail and hospitality. This is a record increase in any one quarter since we began tracking vacancy and whilst it’s not right to assume that this spells the end of physical retailing, it does reflect the immense pressure on operators trading through a pandemic. This is compounded by the demonstrable lack of businesses looking to open new stores when sites become vacant.
Shopping centres in particular have struggled, being so exposed to fashion and restaurant operators, as well as having less ‘essential retailing’ to help retain footfall in lockdown periods. Retail parks however should see a reprieve in coming quarters. Whilst the vacancy rate on retail parks is on an upward trajectory, these locations are becoming increasingly popular with consumers who can drive to these sites and readily socially distance in larger format stores. These units then could become more attractive to retailers who are looking to expand and make the most of the availability of space.”