The continuing impact of the recession, and the fact that there is unlikely to be a fast route to recovery, is illustrated in a report published yesterday by the Local Data Company, a leading supplier of retail sector data.
The report, entitled Broken teeth – faded smile, reveals that around 12,000 independent shops and 7,000 branches of major chains have closed so far this year. The average retail vacancy rate across Britain has increased from 4 per cent twelve months ago to almost 12 per cent today.
Of the 800 Woolworths branches that closed last winter, only about 200 have been sold, leaving large gaps in the prime retail pitches of town centres throughout the country. Of those that have been sold, many have been acquired by “pound shop” retailers, generally driving down the overall quality of the retail sector.
The report summarises the significance of its findings succinctly:
Economically, there are few sadder sites than an empty shop. Just as thriving town centres demonstrate vitality, empty shops lay bare weakness and failure… Empty shops have a corrosive effect upon the confidence of any area – and their numbers are growing.
Empty shops are the most visible indicator of the fragility of the economy. The report observes that, although there are also some optimistic indicators, longer-term prospects are far from certain:
A heat wave and a new round of sales brought shoppers out in June. An increase in retail sales volume of 2.9% over June 2008, the largest annual gain since December, was way above expectations and could set the scene for a stronger than expected second half of the year. However this has to be balanced against continued rises in unemployment and therefore less spending power overall.
Pressure on the High Street will continue as a consequence of the growing popularity of online shopping, which, despite the downturn, is growing at an annual rate of over 12 per cent.
One must, therefore, wonder whether there will ever be a complete recovery for the traditional retail sector in this country, in which case one of the challenges for government may be to reassess the uses to which we put our town centres.
Thanks for the post. The impact of the recession on British retailing is a bit different than in the US, but mirrors closely the impact the recession is having on small and independent retailers here. As consumers pull back from discretionary spending, the viability of whole swaths of small and independent retailers comes into question, and there’s no sign that consumers are going to be joining the recovery any time soon. The impact on town centers and other retail districts here is similar to what you cite, as well as the phenomenon we see of dead and dying malls. The whole retailing landscape is on the verge of being transformed profoundly, and not in a good way.