The North East had the highest rate of empty shops in the UK at the end of last year despite seeing an increase in store openings.
Rising costs and high inflation have been hammering the high street, with many businesses curtailing investment and bringing down the shutters. But the number of vacant stores across the UK is now beginning to improve, according to figures released by the British Retail Consortium in conjunction with the Local Data Company.
National rates stood at 13.8% at the end of 2022, which was 0.1 percentage points better than the third quarter and 0.6 percentage points better than the same period last year. It also marked the fifth consecutive quarter of falling vacancy rates.
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But the North East fared the worst out of all 11 UK regions analysed, with a vacancy rate of 18.2%, although that was a small improvement – 0.4% – on the figure for the third quarter of 2022. It also showed the region’s shops were faring better than a year ago, when it had a 19.9% empty rate.
Helen Dickinson, chief executive of the British Retail Consortium, also said the region had more openings than other regions. She said: “While the number of empty stores reduced in the final quarter of 2022, vacancy rates have not recovered to pre-pandemic levels. Retail occupancy was boosted by the return of international tourists visiting UK towns and cities and more frequent visits to offices.
“These trends have given many retailers the confidence to invest in repurposing and reopening empty units. The North East, in particular, has benefitted from this investment boost, with the region seeing the biggest increase in store openings. However, it still lags behind other parts of the UK, with the highest vacancy rate in the country.
“The first half of 2023 will likely be yet another challenging time for retailers and their customers. There are few signs that retailers’ input costs will ease, putting further pressure on margins, and making businesses think twice on how much investment to make. However, the situation should improve in the second half of the year, as inflationary pressures begin to ease and consumer confidence is expected to return.”
All locations – high streets, retail parks and shopping centres – saw improvements, but it was retail parks which are seeing the most success, with vacancies standing at just 9%, 0.7% down on the previous quarter.
Lucy Stainton, commercial director of Local Data Company, added: “With vacancy rates being such a good barometer of the overall health of the physical retail and leisure landscape, it’s really positive to see the number of empty units at a GB level continuing to fall since they peaked mid-pandemic. Retail parks continue to outperform other location types which is perhaps an indication that some of those shopping habits formed during the height of covid are sticking – with consumers favouring these drive-to locations and larger format units.
“That being said, shopping centres have also seen a relatively significant decline in vacancy rates with investors in some instances seeing an opportunity to convert space into alternative uses to meet the needs of the local catchment, as well as new concepts coming to market and brands returning to expansion.
“The Christmas trading period seemed to indicate that consumers were favouring, and returning to stores, alongside their online spend. With retail spaces sitting at the centre of our communities hopefully this will support a continued, even if measured decrease in empty units.”
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