The British Retail Consortium and Springboard have published the Footfall and Vacancies Monitor for July 2015, and it paints an interesting picture for the changing shape of High Street retail.
The national town centre vacancy rate fell to 9.8 per cent in July, down from the 10.2 per cent rate reported in April 2015. This is the lowest reported rate since BRC/Springboard began reporting the data in four years (July 2011).
Footfall in July was 1.1 per cent lower than a year ago, up from the 1.5 per cent fall in June, with High Streets and Shopping Centres reporting a decline of 2.2 per cent and 2.5 per cent respectively.
Footfall in retail park locations fared the best with a 3.1 per cent increase year-on-year. Greater London was the only region to report positive footfall growth.
So why are there more shops but fewer shoppers on the UK High Street today?
Helen Dickinson, British Retail Consortium Director General, said: “The fall in shop vacancy rates to below 10 per cent for the first time since this monitor began will also be welcomed, albeit cautiously.
“For years, structural changes within retail have been challenging the role of the ‘traditional’ High Street. Many high streets up and down the country have been working to meet these challenges by reshaping themselves (in some cases becoming smaller) and working hard to establish their own unique offer as well integrating it with a digital presence.
"Despite this, the vacancy rate has remained stubbornly high – the dip below ten per cent for the first time may be indicative of successful attempts to reshape Britain’s high streets in some locations.
Dickinson went on: “The clear note of caution can be found in the footfall figures. No matter how successful high streets are in re-inventing themselves, if they can’t deliver increased footfall we could easily see vacancy rates climbing again.
"It’s worth noting that the footfall decline has slowed this month, but it still has a way to go. So today’s numbers seem to indicate that some British high streets are beginning to solve their space problem, but have yet to capitalise on this and drive up shopper numbers. This is a delicate balancing act and could easily be derailed.
"Reducing the burden of business rates would give high street operators the opportunity they need to allow more of them to finally flourish.”
How can we expect the UK High Street to evolve in the future?
Firstly, urban locations generate over three quarters of all footfall nationally and so by their sheer critical mass will continue to remain the focus of retail activity; and, secondly, the diversity of occupiers in urban locations means they are better able to harness opportunities emerging through the growth in leisure and food and beverage spend.
The improvement in the vacancy rate for the second consecutive quarter to under 10 per cent is testament to this, and is positive news given that many retailers are taking the opportunity to rationalise their networks as leases come to an end.
However, there needs to be a note of caution as the improvement in the vacancy rate is not universal, with occupation continuing to drop in some areas across the UK.
These small dips and rises in footfall and vacancy rates do not tell the overall picture – there is still a space for High Street retail, but stores are having to be smarter and leaner, as well as focusing on their core strengths to flourish.