Shopper footfall flags, vacancy rate reduces - SRC

Last month’s result is below the 3-month average of -1.5 per cent and 12-month average of -1.6 per cent

The data from the Scottish Retail Consortium and Springboard also revealed that the Scottish vacancy rate improved to 7.5 per cent in July from 8.4 per cent in April.

David Lonsdale, Director, Scottish Retail Consortium said: “These results are something of a mixed bag for Scotland’s retail industry, with a welcome reduction in the shop premises vacancy rate unfortunately coupled with shopper footfall flagging once again. Indeed shopper footfall in stores dipped for a second successive month and at a faster rate than the average over the past three months, pointing to a continuing fragility in demand and the ongoing popularity of online retailing. The second quarterly improvement in a row in the vacancy rate is encouraging, though it remains to be seen whether this reflects units being taken up on a temporary or more sustained basis.

“Retailers’ prospects are ultimately determined by the state of the economy, the balance between their income and costs and their own ability to adapt and seize on the opportunities that arise. These are testing times for the industry which is Scotland’s largest private sector employer, and the Holyrood Government and MSPs can assist by taking tangible action in the upcoming Scottish Budget to bolster consumer and business sentiment. Retailers will be looking for a clear road map for future tax and regulatory changes, a tight lid on personal and business tax rates and charges, and for the scrapping of the Scotland-only rates surcharge on medium and larger sized firms.”

Diane Wehrle, Marketing and Insights Director, Springboard said: “July saw a break in the clouds in some retail areas, with better weather and strong end of sale discounting of up to 70 per cent off, helping to lessen the decline in high street footfall in Scotland to -1.9 per cent compared with -3.3 per cent in June. Some high streets saw the changes in exchange rates produce increased spend from overseas visitors who could get incredible value with seasonal sales and strong exchange rates providing an unbeatable shopping offer. However, after 26 months of consecutive growth in footfall for out of town locations up until May this year, July followed June with a second month of footfall decline of 1 per cent and shopping centres were down by 3.4 per cent.”

“Unlike the UK, where vacancies increased by 0.5 percentage points to 10.1 per cent, the vacancy rate in Scotland dropped by 0.9 percentage points from an already strong level of 8.4 per cent to 7.5 per cent. Not only is this the second lowest level of any area in the UK, but it has noticeably improved from a rate of 10.6 per cent in July 2015. The April to June quarter can prove irregular, as typically post-Christmas pop ups and temporary stores disappear from the high street. Across the UK it seems that the EU Referendum and political and economic uncertainty of the last quarter will have deterred some retailers from taking on leases but Scotland appears to have been insulated from this. The next quarter’s figures will be the ones to watch to get a clear picture on any continued increase in vacancy rates, which would be concerning for town centres across the UK.”