Spike in number of vacant Scottish shops signals troubling times
The town centre vacancy rate for Scotland was 12.0 per cent last month, an increase from 11.1 per cent in October 2018, and above the average vacancy rate for the UK, which is 9.9 per cent.
Footfall in Scotland also declined by 1.9 per cent on the year, a lesser decline relative to a year ago when it fell by 4.6 per cent.
Footfall fell both on the High Street by 3.7 per cent, and in Retail Parks by 0.7 per cent but grew by 0.7 per cent in Shopping Centres, the fastest rate of growth in this shopping locations since December 2016.
David Lonsdale, SRC Director | Scottish Retail Consortium, said: “These results offer few crumbs of comfort for those retailers who have yet to fully embrace multi-channel retailing. The shop vacancy rate spiked once again, to the highest figure for five years, and the fourth successive quarter that the rate has been above 10%. It is troubling that almost one in every eight retail premises in our town centres now lies vacant, more so with retailers’ business rates bills set to escalate by a further £13.2 million this coming April.
“Whilst shopper footfall recorded its best performance for five months, offering a glimmer of light, the fact is it still contracted compared to a year ago, albeit at a less pronounced rate than over the past quarter and indeed year as a whole.
“This is further proof of the profound transformation affecting the retail industry, due to changing shopping habits, rising cost pressures and becalmed consumer spending. Retailers and shopping destinations are clearly going to have to work harder to attract custom through a blend of improvements to service, experience, pricing and promotions. Policy makers can play their part through a more concerted effort to halt and then begin to reverse relentless rises in costs.”
Diane Wehrle, Marketing and Insights Director | Springboard, said: “We should not be persuaded that the improved footfall in Scotland in January of -1.9 per cent compared with a drop of -3 per cent in December suggests trading conditions have noticeably improved. Footfall was volatile over the month, rising in the first and third weeks but declining in the second and fourth weeks. And though the largest rise of +2.6 per cent in the first week was the largest of the month, the increase was largely driven by one day - New Year’s Eve (Monday 31st December) - which showed an uplift of +151 per cent across the UK; which again should be taken with a pinch of salt as it was compared against New Year’s Day In 2017 when trading hours were more limited and the weather was very poor.
“Despite the fact that the vacancy rate is a lagged and sticky indicator – trailing sales and footfall trends, and subject to the vagaries of lease lengths – in January it reflected the ongoing challenges faced by retailers and recent store closures. Not only did it slip slightly to 12 per cent from 11.1 per cent in the previous quarter,it is still the fourth the highest in the UK.”