The UK has lost approximately 6,000 retail outlets in the past five years, as the industry feels the impact of Covid lockdowns and high business costs due to soaring inflation and interest rates.
In a report from The Grocer, research from the British Retail Consortium (BRC) found that the pandemic and increased costs were the main cause in the closures, and called on the government to reform the “broken” rates system.
Store vacancy rates have continued to climb this year, with rising rents and increased competition putting pressure on smaller and independent businesses in the UK.
The latest figures showed that the overall vacancy rate increased to 13.9% in Q2 of 2023, 0.1 percentage points worse than Q1 and only marginally better than the same period last year.
However, shopping centre vacancies remained stable at 17.8%, the same level as in Q1, with high street vacancies increasing to 13.9% over the same period, 0.1% worse than the first quarter.
Meanwhile retail parks remained the location with the lowest vacancy levels, seeing a fall to 8.1% in Q2, a 0.6 percentage point improvement from Q1.
Last month, Iceland warned that the proposed post-Brexit border controls, the Windsor Framework and restrictions on the promotion of HFSS foods were “driving up costs” for businesses.
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BRC CEO, Helen Dickinson said: “The past five years saw Britain lose 6,000 retail outlets, with crippling business rates and the impact of the Covid lockdowns a key part of decisions to close stores and think twice about new openings.
“To inject more vibrancy into high streets and town centres, and prevent further store closures, government should review the broken business rates system.”
She added: “Currently, there’s an additional £400 million going on retailers’ bills next April, which will put a brake on the vital investment our towns and cities so desperately need.
“The government announcement earlier in the week about making changes of use to vacant units easier is welcome, but it’s important local councils have a cohesive plan, and don’t leave gap-toothed high streets that are no longer a customer destination and risk becoming inviable.
“Government should go one step further and freeze rates bills next year,” Dickinson commented.
