Five shops a day were lost from Britain’s high streets in 2016, but there was a post-Brexit vote revival in the fourth quarter.
According to the London Data Company’s 2016 annual report, the final quarter of the year saw more shops opening than closing, with the positive trend continuing into 2017.
The number of retail and leisure closures remained relatively stable at around 47,500 each year since 2012. Openings varied more, but in the past year averaged 125 a day and amounted to 45,700 in the year.
The mid-year slump, around the time of the Brexit vote, saw openings drop significantly lower than closures. However, autumn saw a bounce back in both openings and closures, with the former overtaking the latter.
England saw the lowest national vacancy rate at 11 per cent, followed by Scotland (11.9 per cent) and Wales (15.2 per cent).
The North-West was the English region with the highest vacancy rate at 15.3 per cent, while London had the lowest at 7.4 per cent.
The North-West also has the highest proportion of shops that have been empty for five or more years, known as persistent vacancy, at 3.5 per cent, while Greater London sat at just one per cent.
Retail parks gained the most occupied units (314) than any other type of location. Shopping centres continued to improve most in vacancy, down from 14.8 per cent to 13.2 per cent, followed by retail parks (6.6 per cent to 5.7 per cent) and town centres (11.7 per cent to 11.2 per cent).
Chingford and Upminster showed significant reductions in vacancy rates, down 8.6 per cent and four per cent respectively.
However, Wigan, Dewsbury, Newport (Monmouthshire) and Burslem all had one-in-four shops sitting empty, with vacancy rates of more than 25 per cent.
LDC analysis of the new business rates valuations per square metre show that twice as many small shops were revalued from below to above the threshold. Shops under 3,000sq ft were also valued on average 30 per cent more per square foot or metre than larger stores.
Greater London, the South-East and the East Midlands all saw valuations rise. However, on a town-by-town basis, Southwold found its way in the top 30 list for increases, with London not even making an appearance. Southwold saw a 170 per cent increase, while Market Harborough in the East Midlands had increases in retail value of more than 50 per cent in 199 retail premises matched to the LDC database.
London was the only region to have seen a decrease in the number of independent shops and a gain in numbers of chain stores over the past half-decade.
Comparison goods stores, which includes electrical retailers, continued to fall in numbers, and in the five years since 2012 had dropped in number by 9,490 units.
Matthew Hopkinson, director of LDC, said: “It was clear at the halfway stage in 2016 that both openings and closures had slowed sharply by the date of the EU referendum vote. Openings had dropped off even more rapidly and that key measure, the gap between the two, had generated a net loss of nearly 2,000 retail operations in the six months to the summer.
“In a year of surprises, what followed was a bump after the slump. Both openings and closures rose back to early-year levels in the autumn, but this time openings had the upper hand and began to correct the net losses of the mid-year trough. It was not enough to fill the gap, but by Christmas it had begun to repair the damage.”
On vacancy rates, he added: “The gradual inching-down of the headline LDC vacancy rate, which began in 2012, came to a halt in the middle of the year. This eventually began to show improvement as 2016 ended and that downward trend has been re-established in the early months of 2017.
“The relationships between the structural shifts between online and offline non-food shops have been taken as straightforward, but maybe they are not. Both have risen since 2008 and online sales continue to take a larger market share, but vacancy has been heading down, albeit gently, since 2012. The rate of growth of online can also be overestimated – at its current growth that segment of the market would not represent half of the retail market until 2030.”
Mr Hopkinson concluded: “The rent rises that have driven revalued rateable values has a lot to do with the changing mix of our retail locations as reflected in LDC’s analysis. The arrival of a chain coffee shop in a shopping street can have a dramatic knock-on effect on businesses around it. Leisure operators, one of the growing groups of retail classes, often pay higher rents than their established neighbours and eventually that affects the rateable valuations of those shops as well.”
