Cause for optimism as store openings grow

Growth in the number of independent businesses accelerated in January for the fifth month in a row on a strongly rising curve, even though numbers of openings and closures remained subdued.

This trend was highlighted in the latest LDC Dynamic Location Intelligence Bulletin. It also showed that multiples – those with five or more stores – moved back into growth, with openings rising and closures falling.

However, comparison (non-food finished goods) shops, which included electrical retailers among many others, were still in decline, but only by a small net amount.

This was against the backdrop of store openings rising faster than closures, which were slightly below those in December.

Based on location, towns saw a deep decline in occupied shops in mid-2016, but are now back to a rising trend and in positive territory.

Shopping centres saw a similar growth curve, having recovered from a slump in the middle of last year. Retail park net openings have moderated but continue their long-term growth path.

The retail vacancy rate in January fell for the second consecutive month, to 12.1 per cent – its lowest level since peaking in 2010.

The leisure vacancy rate also fell to 8.1 per cent. While the overall vacancy rate, which is made up of both, fell to a new level of 11 per cent. This means one-in-nine retail and leisure units stand empty.

Local Data Company (LDC) director Matthew Hopkinson said that he saw some cause for optimism in what was happening on the UK’s high streets. He added: “Shop openings are subdued but stable, but the rate of shop closures is dropping. The result is an encouraging beginning to a reversal of the net loss of retailers that we saw in the middle of 2016.

“This is even evident in the long-term trend of decreasing numbers of comparison (finished goods) shops, which although still experiencing a net loss have seen a significant improvement in this vital sign since the middle of last year. The mutually beneficial relationship of bricks and clicks is now clearly evident.”

Mr Hopkinson concluded: “The rebound in independent businesses occupying space in town centres has been impressive and has been gaining strength. The timing of this is fascinating, as businesses are beginning to assess the impact of their new rateable values on the rates bills that they will have to pay from April. Will this suck some of the vitality from this sector, or will it continue to grow regardless?”