Shop vacancy rates stabilise at 14.5% but north-south divide remains

Shop vacancy rates have stabilised at 14.5% during the first half of this year but the gap between the best and worst performing towns has widened, the latest research by The Local Data Company has found.

The review of shop vacancy figures of more than 1,000 retail centres shows that the threefold increase in vacancy rates since 2007 has been halted, but in extreme centres, one in three shops is vacant.

Cementing the north-south divide, all southern regions were found to have an average vacancy at or below 11% while the Midlands and North range from just under 13% in the East Midlands to 16% in the North West.

The top 10 worst-performing large centres are in the West Midlands and the North while seven out of the top 10 best large centres are in the South.

Retailers are looking to close older and poorer performing outlets where possible, and relocate into new stores in the bigger and better centres, streets and warehouses to bolster diminishing profits. This trend is expected to continue to benefit larger landlords with prime portfolios at the expense of high streets and secondary centres.

Stockport town centre was found to have the highest vacancy rate of the larger town centres (those containing more than 400 shops) with 27.7% of its shops empty, up by 3.5%. Blackpool and Grimbsy followed with vacancy rates of 27.5%.

The larger town centre with the best vacancy rate was Bromley, with 9% of its shops empty.

Dudley was the medium town centre (with between 200 and 399 shops) with the highest vacancy rate of 29.4%, up 16.1%, while Leigh Park and Margate were the worst performing small centres with vacancy rates of 36.4% and 36.1% respectively.

A three year analysis of 75 towns from the first half of 2008 found 7% had weathered the storm, while 29% had an increase of less than a 10% rise in shop vacancy. The remaining 64% showed increases, in the worst cases, of over 20%.

Matthew Hopkinson, director at the Local Data Company, said:“This report shows how fragile the British high street is in parts of the country. The stark reality is that Great Britain has too many shops in the wrong locations and of the wrong size. The diversity of shop vacancy rates is clear evidence that a local approach is required that ties in with consumer needs and the realities of modern retailing. The market still has significant corrections ahead and the impact of these will vary significantly according to location.”

Liz Peace, chief executive of the British Property Federation, said: “Many high streets and town centres are in a critical, but stable condition. Their recovery is not just going to happen, but will need nursing. It will require investment from our sector, and the confidence that goes with a local authority that has leadership, a clear vision, and a willingness to plan and manage their retail environment. We must also accept that some secondary retail units are no longer viable and plan their transition to other uses. Simply hurting successful retailing to level the playing field is not the solution. We must find new ways to get people on to our high streets and in our local shops.”