Rob Davies 

Shop openings slump as big UK retailers scale back expansion plans

Pre-EU referendum jitters blamed for 15% decline in high street shop openings as vacancy rates rise for first time since 2012
  
  

Empty high street shop
‘Increased costs for retailers coupled with fierce competition and oversupply of shops is likely to see increased levels of distress and failure among retailers’. Photograph: Gareth Phillips for the Guardian

Pre-EU referendum jitters have caused a slump in the number of shops opening their doors, according to a biannual report monitoring vacancy rates on the UK high street. Shop closures outstripped openings by 1,997 from January to the end of June, according to the retail data firm Local Data Company.

Although the number of closures was down by 5% to 22,801, openings tumbled 15% to 20,804, reversing the trend seen in the second half of 2015, when there were 335 more openings than closures.

The John Lewis Partnership is among the major names to have scaled back expansion, saying last week that it had abandoned plans to open seven new Waitrose supermarkets.

Vacancy rates – the number of retail sites standing empty – began to rise at the end of June after declining steadily since early 2012.

Matthew Hopkinson, the director of LDC, said: “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. Since the end of June we have seen the vacancy rate in leisure outlets inch upwards.”

Hopkinson predicted that some retailers would not survive as the weakness of sterling forces up costs, squeezing shops already battling each other for a share of customers’ wallets. “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,” he said.

His warning comes after figures for August from the British Retail Consortium and Springboard showed retailers underperforming the rest of the high street. There were 0.1% more visitors to the high street than there were in August 2015, according to the survey, but this was attributed to people visiting restaurants and other nightlife venues. Retail sales fell during the period, with the number of visitors to shopping centres down 1.9%.

The LDC report, based on visits to 2,700 towns and cities, exposed a gulf between the towns with the most vacant shops and those with the fewest. Beaconsfield in Buckinghamshire had no empty shops, while a third of those in Burslem, Stoke-on-Trent, had no occupant.

The north-east is the region with the highest percentage of long-term vacant units, LDC said, while vacancy rates were higher in Wales, at 15.1%, than in Scotland, at 12.1%, and England with 11.3%.

 

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