Fewer vacant stores at the end of 2022

The British Retail Consortium reported that in the fourth quarter of 2022, the overall vacancy rate improved to 13.8 per cent, which was 0.1 percentage points better than Q3 and 0.6 percentage points better than the same period last year.

The data revealed that all sectors reported a decline in vacancy rates with shopping centre vacancies improving to 18.2 per cent, down from 18.8 per cent in Q3 2022, high-street vacancies improved to 13.8 per cent in Q4, compared to 13.9 per cent in Q3 and retail park vacancies improved to 9.0 per cent in Q4, a 0.7 percentage point reduction from Q3 2022.

Geographically, Greater London, South East, and East of England had the lowest vacancy rates. The highest rates were in the North East, followed by Wales and the West Midlands.

Helen Dickinson OBE, chief executive of the British Retail Consortium, said while the number of empty stores reduced in the final quarter of 2022, vacancy rates have not recovered to pre-pandemic levels.

“Retail occupancy was boosted by the return of international tourists visiting UK towns and cities and more frequent visits to offices,” she said.

“These trends have given many retailers the confidence to invest in repurposing and reopening empty units. The North East, in particular, has benefitted from this investment boost, with the region seeing the biggest increase in store openings. However, it still lags behind other parts of the UK, with the highest vacancy rate in the country.

“The first half of 2023 will likely be yet another challenging time for retailers and their customers. There are few signs that retailers’ input costs will ease, putting further pressure on margins, and making businesses think twice on how much investment to make. However, the situation should improve in the second half of the year, as inflationary pressures begin to ease and consumer confidence is expected to return.”

Lucy Stainton, commercial director at Local Data Company, said vacancy rates are such a good barometer of the overall health of the physical retail and leisure landscape.

“It’s really positive to see the number of empty units at a GB level continuing to fall since they peaked mid-pandemic,” she said.

“Retail parks continue to outperform other location types which is perhaps an indication that some of those shopping habits formed during the height of COVID-19 are sticking — with consumers favouring these drive-to locations and larger format units.

“That being said, shopping centres have also seen a relatively significant decline in vacancy rates with investors in some instances seeing an opportunity to convert space into alternative uses to meet the needs of the local catchment, as well as new concepts coming to market and brands returning to expansion. The Christmas trading period seemed to indicate that consumers were favouring, and returning to stores, alongside their online spend. With retail spaces sitting at the centre of our communities hopefully this will support a continued, even if measured decrease in empty units.”