Retailers cautious to invest as retail vacancies plateau

The overall vacancy rate for retail units in the UK remained at 13.8% of Q1 in 2023, the same rate it was at for Q4 2022, according to data from the British Retail Consortium.

However, this figure was 0.3 percentage points better when compared with the same period last year.

Shopping centre vacancies improved to 17.8%, down from 18.2% in Q4 2022 while retail park vacancies improved to 8.7% in Q1, a 0.3 percentage point reduction from Q4 2022.

Retail parks remain by far and away the retail location with the lowest vacancy rate.

High street vacancies remained at 13.8% in Q1, the same level as Q4.

Greater London, Southeast and East of England had the lowest vacancy rates while the highest rates were found in the Northeast, followed by Wales and the West Midlands.

Helen Dickinson OBE, CEO of the BRC, said: “The vacancy rate in the first quarter of 2023 saw no improvement as cost pressures made many retailers think twice about investing in new stores. Despite shopping centres holding the highest proportion of empty units compared to other locations, it saw the largest quarterly occupancy increase thanks to the success of outlets as well as recent efforts to repurpose empty units, especially in the Northeast.

“While Northern regions saw the biggest uptick in net openings, they continued to lag behind the rest of the UK with the highest vacancy rates in the country, laying bare the North-South divide.”

She added: “With stubbornly high inflation and huge cost pressures facing business, retailers will continue to be cautious about future investments. Any regulatory burdens from Government will only force retailers to make difficult decisions about whether they can open new stores, or if they must close existing ones.

“By keeping oncoming regulation to a minimum, Government will help to support upholding and growing vibrant communities across the country.”