According to the LDC, high street shop closures are on the rise as retail sales fall. Vacancy rates for 2011 may seem stable – an average of 14.3% - the figure hides huge discrepancies across the UK.
Some towns and cities have suffered massive shop losses. Indeed, walk down any central London thoroughfare and it’s hard to understand the dire warnings over the state of the UK high street. But elsewhere in the UK, it’s a different story. Boarded up shops and ‘Closing down sale’ signs have become commonplace – and it’s only going to get worse this year.
Worst hit regions are Scotland and Wales, where the average vacancy figure stands at 15.4% and 17.3% respectively. But Stockport near Manchester is the town that has suffered the fastest decline. Store vacancies there stand at over 30% - a staggering third of all its high street businesses have gone bust or packed up.
So, what’s killing the high street? Well, new data from the British Retail Consortium (BRC) shows that retail sales values have dropped in January, down 0.3% on a like-for-like basis. It doesn’t sound too drastic, but that's the second worst January since the survey started 17 years ago – even last year, sales managed a 2.3% jump.
Stephen Robertson, BRC director general, says: ‘Customers parked their worries in December and spent, encouraged by discounts. Now, in the New Year, reality has bitten again as concerns about jobs, wages and household costs reassert themselves. Actual spending shows households concentrating on paying off debt, saving and battening down for another tough year.’
What little spending we are doing is happening online, apparently – which explains the state of the high street. Retail consultancy Verdict has released data showing that online sales doubled from 5.1% in 2000 to 10.2% in 2011. Out-of-town shopping centres are also to blame: the share of sales loot claimed by Bluewater and its ilk hit 31% last year, up from 28.1% in 2000.
‘Technology is driving consumer behaviour to a world of engagement, entertainment and the ability to shop where, how and when we like,’ says Matthew Hopkinson, director of the Local Data Company. And the UK consumer likes the tiny prices and convenience of the online shop more than its pricier high street counterpart, apparently.
Mary Portas’ high street review, which came out in December last year, outlined a number of ways to save the UK high street. There’s even a £1m prize up for grabs – 12 lucky (or perhaps not-so-lucky) run-down high streets will get the cash – and Portas’ expertise – to help turn around their fortunes.
It will be much harder to bring the high street back from the dead, than to simply nurse the ailing invalids back to health. Will it be too late?