According to a survey published today by the Local Data Company (LDC) town centre vacancies increased to an average of 14.6% February, up slightly from January and is the highest since they started collecting information on this four years ago..that's one in seven now shut. The LDC visit town centres, shopping centres and retail parks all year round to gather this information and have noticed a drop in occupancy levels since Christmas. They say they expect closure rates to continue especially as GAME Group are going into administration and another 600 or so stores are potentially at risk, although it continues to trade whilst looking to solve its debt and supply chain problems.
To put it in context though some areas are thriving but there's a real north /south divide on this with many shopping areas in the south doing well whilst areas in the north are clearly struggling. Their report showed that some of the better performing areas in the south are Cambridge, Camden, Exeter, Kingston, Salisbury and St Albans and Taunton. Some of the worst hit areas are Bradford, Derby, Hull, Sheffield, Southampton, Stockport, Swindon, Nottingham, Warrington, and Wolverhampton.
There's a lot of reasons this is happening, reduced consumer confidence amidst our economic problems means people are paying off debts rather than borrowing and saving rather than spending. Spending figures are down since Christmas but retail sales are actually up on this period last year by 1%. With the cost of living rising and petrol prices higher than they've ever been people have less money to spend beyond the cost of living, preferring cheaper deals online or at supermarkets.
The quarterly rents due this weekend are often the tipping point for companies struggling with cash flow as they stump up millions of pounds of rents in advance. Part of the Mary Portas review is to look into landlords providing monthly rents, making it easier for companies to retain more cash within the business as well as wider business community investment, but as the tumble weeds whistle down some of our high streets is it too late to inject some life back into them?
"It is a timely reminder to the government, who are due to respond to the Portas Review this month, of the significant challenges facing town and city centres up and down the country," Matthew Hopkinson - Director, LCD.