Referendum sparks slowdown in store openings
A slowdown in shop openings in the run-up to the EU referendum has reversed the gains of 2015 and hampered improving vacancy rates, new research has revealed.
The London Data Company’s half-year report, In the Balance, found that in the first half of 2016 store closures exceeded openings by 1,997. This was in contrast to the second half of 2015, when store openings surpassed closures by 335.
This sharp drop was a result of shop openings falling by 15 per cent in the six months to June, while closures dropped by just five per cent.
The report also revealed that England had the lowest national vacancy rate at 11.3 per cent, followed by Scotland at 12.1 per cent and Wales at 15.1 per cent.
Retail parks gained more units than any other type of location, while shopping centres made the best improvement in vacancy rates. Town centres have proven resilient to change in overall shops numbers since 2011.
Burslem in Stoke-on-Trent had the highest vacancy rate in the country at 33.3 per cent, while Beaconsfield was the top-performing town with no vacant units.
The North-East was the region with the highest percentage of long-term vacant units [where they have been empty for three years or more]. Whereas, London was the only region to suffer a loss in the number of independent shops and see a gain in the number of chain stores over the past five years.
Matthew Hopkinson, a director of the LDC, commented: “Growth slackened significantly in the half-year leading up to the referendum at the end of June, taking the steam out of the gentle improvement in vacancy that has improved by 2.3 per cent since 2011.
“Since the end of June, we have seen the vacancy rate in leisure outlets inch upwards. Whether this will be just a twitch in the statistics or the beginning of a long-term reversal will become clear over the coming months. Of note is the structural change in the number of retail units by location type in the past five years, with a net loss of over 5,000 units but with out of town retail parks growing by nearly 1,300 new units. Not only how we ‘shop’, but where we shop has changed dramatically.”
He added: “This new report sets the benchmarks for developments on the high street for the coming years which will see the UK exit the EU and strike out on its own. Increased costs for retailers coupled with fierce competition and oversupply of shops is likely to see increased levels of distress and failure among retailers with survival of the fittest being the order of the day.”