Despite cause for optimism in the economy, the high street is noticeably emptier and quieter than before. The British Retail Consortium (BRC) revealed fresh data suggesting that vacancy rates across Great Britain have risen from 13.7 per cent in 2020 Q4 to 14 per cent in the first three months of 2021.
The collapse of retailers both big and small means that 5,000 retailers have disappeared, equivalent to one in seven retail spaces lying empty. There are reasons to be optimistic about the future of retail, but as current figures show, that may mean the high street has to move with the times to thrive.
Causes of vacancy
The BRC has given a variety of reasons for the spike in vacancy rates among retailers in early 2021. Vacancies have reportedly been rising for three consecutive years in a row, having started this current uptrend in the first three months of 2018.
Larger shopping centres, particularly those based in the North of England, were most vulnerable in the past year or so. One of the reasons these types of stores fared worse than others was due to the high volume of retailers in these spaces deemed non-essential.
As a result, they had no option of remaining open during any of the lockdowns during the past year of the pandemic. Lucy Stainton, Director of Retail and Strategic Partnerships at the Local Data Company, explained, saying: “Shopping centres have been particularly exposed to the effects of the COVID-19 pandemic, principally having a lower proportion of ‘essential’ retailing as well as being exposed to categories which are in decline such as fashion, department stores and casual dining.”
Helen Dickinson OBE, Chief Executive of the BRC, claimed that 12 per cent of units at shopping centres were vacant in early 2021.
A revolution in retail
The true impact of the lockdowns on the high street is unlikely to be fully visible until all restrictions are lifted in the coming weeks, assuming the government’s timetable is achievable. There are encouraging signs that the economy is firing on all cylinders, especially in the services sector.
Markit PMI, which carries out monthly surveys of economic performance, measures activity across sectors including the main engine of economic growth, in services, which includes retail. Readings above 50 denote expansion, and the latest service sector PMI suggested rapid growth, with the latest reading rising to 61 in April. This was the fastest rate of expansion observed since October 2013, when the UK economy was recovering strongly after the 2008 financial crisis.
One of the leading drivers of this rosy growth picture was consumer spending. The UK’s swift vaccine rollout has appeared to keep a lid on cases of COVID-19, allowing a faster easing of lockdown restrictions, which could continue to support such growth for many months to come.
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