UK store vacancy and opening rates improve but fashion is weak

By

Sandra Halliday

Published
Apr 13, 2017

Data coming out of UK retail continues to show sharp fluctuations with signs of increasing inflation as well as deflation in the fashion sector and sales figures and vacancy rates patchy. Now the latest vacancy rate numbers for March paint an optimistic picture overall but still mean bad news for the fashion sector.

Local Data Company (LDC) figures show that shop numbers grew for the sixth month in a row in March and the retail vacancy rate fell. It reached 12%, down from a historic high of 14.6% as openings rose faster than closures and demolitions reduced the overall number of vacant units.

Good news, right? Well, yes. But while almost all types of outlet (Convenience, Leisure and Service) grew in terms of openings, the exception was what LDC calls the Comparison sector. That means non-food stores, which includes fashion, homewares, beauty and other stores competing hard for consumers’ discretionary spend. They slid back into decline, underscoring what analysts and data compilers have been saying for some time - that non-food retail is moving online faster than ever and customers are switching their spend away from items like fashion in favour of dining, cinema trips and other experiences.

While all three types of location (town centre high streets shopping centres and retail parks) saw growth in March, that was likely to have been due to a profusion of coffee shops, doughnut stores, cafés and sushi bars opening rather than stores selling clothes, shoes and handbags.

It’s most certainly a disappointment for the fashion sector with non-food stores having moved above zero during February offering some hope of an improving trend.

LDC said that improvements in vacancy rates mean that one in eight shops are now empty, compared to one in seven when vacancies were at a peak.

But its also said that the vacancy and openings picture is not a consistent one. While rising net openings in towns and among independents are having a positive impact overall, looking at the floor space in retail parks, it’s clear that space out of town is being brought into use at a much greater rate than on high streets.