High streets to become “ghost towns”
The latest shop vacancy report, carried out by Local Data Company, showed that more than 25,000 high street shops closed this decade.
According to the report, which studied 506 town centres and 145,000 shops between January and June 2012, the volume of retail space combined with a fall in disposable income is creating “ghost towns” across the country.
In the report, entitled Too Many Shops, consumer spending on the high street is shown to have decreased to 2002 levels, whereas online spending levels will increase to 13.2% by the end of the year, due to mobile technology. And the “race for space” by multiple retailers has not helped the situation and has added an extra 6.6sqm of floor space since 2005, despite a fall in profitability.
A significant north-south divide was discovered in the report as the average level of vacant stores in London was 12.7%, but Wales, the Midlands and the north saw an average of 18.5%, while Scotland had an average of 16.7%. The worst overall region was the north west with 20.1% vacant stores, but the report said that all regions had seen vacancy increase over the last 12 months.
Levels of vacant stores varied depending on the size and type retail environment – for example, the report said that large high streets saw vacancy levels of 16.2%, whereas small town centres had 10.6% vacant units. Retail parks, however, bucked the trend and had only 8.1% empty units and London was not affected as much and saw only a 0.2% increase in vacant stores on last year.
The report said that the rise in empty units could not be blamed entirely on the increase of retail floor space as, “after all, retailers in countries like the US survive with far higher ratios of space to income than are seen in the UK”.
The economy may not recover fully for a decade and, with further public spending cuts planned, it will be a slow recovery, it said. The continued fall in consumer disposable income is also likely to further decrease, which will also further constrain spend.
Director at Local Data Company Matthew Hopkinson explained that the report showed both economical and structural issues, which were affecting town centres all over the country. He said: “These issues still have some way to go before we see wide stability and positive change. Most importantly, it shows that, at the town level, a widening gap in health exists between town centres depending on their location, offer and consumer profile.
“Every town has the opportunity to attract consumers and spend. However, aspirations must be tempered with reality and reflect the needs and spend of each town’s consumer.”
- vacant stores
- town centres
- disposable income
- 1% empty units
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- 6% vacant units
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- data company
- local data company