According to figures released under the Freedom of Information Act (FOI), 15.9% of all shops and retail outlets in the UK now lie empty. These figures quantify the scale of the challenge facing the UK high street after one of the toughest trading periods since the 2008 recession.
Getting an accurate picture of the real health of the high street is difficult, but through the use of FOI, we managed to gain valuable insight into what local authorities are experiencing. With a total of 418 councils in the UK, our mean average indicates that the total number of retail units that now lie empty stands at 50,578, or an average of 121 empty retail units per council.
There were 319,000 retail businesses in 2018 according to the ONS.1 Given this figure, we believe that the void rate now stands at 15.9% of the total.2
Our figures are in line with those released by the retail analyst firm Springboard, which found that vacancy rates are now running at around 10%.3 Our figures differ in that local authorities under FOI have released them, so arguably they should be more reflective of the reality on the ground, as an empty retail unit does not necessarily mean it's vacant and available for lease. However, the Springboard figures do point to a more alarming trend with retail footfall continually declining, with it recently announced that the retail sector had experienced the worst footfall figures in six years.4
Retail is one of the most important markets in the UK, with its economic output in 2017 equating to £92.8bn, employing some 2.8mn people and comprising of some 319,000 businesses.5 But 2018 turned into the "year of crisis" for the retail sector. In the first 100 days of 2018, some 18 mid- and large-sized retailers collapsed, impacting more jobs than in the entire year prior – and this has appeared to be the trend during 2019.
It is estimated that business rates are the equivalent of 2.3% of overall business costs for a traditional brick and mortar retailer, compared to just 0.6% for pure-play online retailers.6
The impact on local government cannot be underestimated either. FOI also identified that 91% of UK local authorities are retail landlords in their own right. Empty units mean lost rental and business rates income, all at a time when many local authorities are reporting increased financial pressures.
The old financial model of the traditional brick and mortar retailer – based on a high street or shopping center built around them in the post war era – was centered on regular increases in sales and 25-year leases with upward rent reviews only. As a result, it has meant high rents and occupancy costs. This has blown apart as a result of both the discounters and the dramatic uptick in online sales. The question is whether this picture continues for the remainder of 2019 and if so, at what speed?
Freedom of Information
The Freedom of Information Act 2000 provides public access to information held by public authorities. It does this in two ways: public authorities are obliged to publish certain information about their activities; and members of the public are entitled to request information from public authorities.
UK Local Government
There are a total of 418 local authorities in the UK, comprising:
England (353 total)
- 27 County Councils (upper tier)
- 201 District Councils (lower tier)
- 32 London Boroughs (unitary)
- 36 Metropolitan Boroughs (unitary)
- 55 Unitary authorities (unitary)
- 2 Sui Generis authorities – City of London Corporation and Isles of Scilly (unitary)
Wales (22 total)
- 22 Unitary authorities (unitary)
Scotland (32 total)
- 32 Unitary authorities (unitary)
Northern Ireland (11 total)
- 11 Unitary authorities (unitary)
For this research, a total of 70 local authorities were requested to release figures under Freedom of Information on the number of retail voids in their area. A total of 47 responded within the proscribed legal framework, representing an 11% sample of the total number of local authority bodies in the UK.
Average void rate per council stands at 121 per authority. Assuming an equal pattern across the UK the nation void rate stands at 50,578.
According to the ONS there were 319,000 retail businesses in 2018.
National void rate therefore stands at 15.9%
Retail administrations in the UK 2008-2018
(Source: Centre for Retail Research)
|Year||Company failures||Store numbers||Employee numbers|
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.