The pandemic has taken its toll on the UK high street, further accelerating store closures.
According to a report from the British Retail Consortium (BRC) and Local Data Company, the vacancy rate across high streets, retail parks and shopping centres rose to 14.5% in the second quarter. It was up from 14.1% in the first quarter and 12.4% in the second quarter a year ago.
Shopping centres have suffered the most, with vacancies standing at 19.4%, while for retail parks the rate was slightly less stark at 11.5%. Greater London has an 11.1% vacancy rate, the lowest nationally, while the worst affected region was the North East where 20.6% of units have shutters down.
BRC chief executive Helen Dickinson stated: “It comes as no surprise that the number of shuttered stores in the UK continues to rise after retailers have been in and out of lockdown for over a year.”
A number of major chains have left the high street in recent years, including the entire Debenhams department store chain and a number of John Lewis outlets. The collapse of the Arcadia Group has also meant that iconic stores Topshop and Miss Selfridge have now vanished.
The increase in vacancies is the latest in a continual series of increases over the past three years, highlighting that the pandemic isn’t the sole cause of the high street’s woes.
Lockdowns have intensified competition from online retail
According to MarketLine data, the UK online retail sector had total revenues of $92.7bn in 2020, representing a compound annual growth rate (CAGR) of 16.4% between 2016 and 2020. The impact of Covid-19 on the online retail sector during 2020 was evident through a steep increase in demand and supply amid lockdown measures.
The Covid-19 pandemic also further accelerated the expansion of e-commerce in supply terms, fuelling the creation of new e-commerce businesses and the digital transformation of existing ones, especially at the level of small and medium enterprises (SMEs). As a result, consumers are now able to purchase almost everything they need online.
Even prior to the pandemic the online retail sector was growing at a strong rate, in 2017 it grew by 9.5% and then a further 8% the following year. The lockdowns imposed in 2020 have further intensified the competition from online retail, accelerating the consumer shift toward shopping online.