The end of last week saw headlines about the number of vacant shops in Scotland. Typical Scottish newspaper examples included:
So, something of a downer to end the first week out of lockdown in Scotland and ahead of a bank holiday weekend.
The data were from the British Retail Consortium/Local Data Company survey of “shop” units and so Scotland was but one part of their regular GB study. I don’t have access to the data (hence why “shop” above is in parentheses as some of the surveys go well beyond retail units) , only the headlines. One of the press releases can be found here, but what was said specifically about Scotland I do not know. Whilst some journalistic licence can be expected, the press release steer is quite clear (though some reporting was much more measured and factual than the newspaper headlines above – see Retail Gazette for example). Some things about this concern me though (and I am aware this is a lonely but previously ploughed furrow – see here, here and here for a sequence of three pieces in the teeth of the pandemic, but there is also a longer history on this blog).
To quote from the press release “In the first quarter of 2021, the overall GB vacancy rate increased to 14.1%, from 13.7% in Q4 2020. It was 1.9 percentage points higher than in the same point in 2020”.
So in one year the rate rose by 1.9%. In the last quarter it rose by 0.4%. So the rate of increase probably slowed in the last quarter. “Soaring”?
First though a quick recap for those who have not been paying much attention. Since March 2020 we have been living through a global pandemic. During that pandemic in the UK there have been three long and deep lockdowns; lockdowns where many shops and other operators such as cafes, bars, pubs, restaurants, B&Bs and hotels were forced by law to shut. Many workers have been on furlough or have lost their jobs. Consumer spending has altered and been markedly curtailed. What spending there has been has often been directed through online channels, which have reached unprecedented sales and penetration rates.
And yet in Scotland (and elsewhere) according to the reporting of the BRC/LDC survey, shop vacancies are not as high as after the financial crash of 2008-9. That’s right, they are lower (the newspapers report they are at a “six-year high”). Yes they are increasing, especially in shopping centres, but they are not (yet) ‘soaring’ and are not at record highs. All this in a longer period of sectoral structural change as well.
This position is testimony to tremendous work by, and resilience of, many, in the face of an unheard of set of problems. Government support, the retailers themselves, rapid changes to business, rates relief, landlords foregoing rents, consumers supporting local stores where they can …. and so on.
The vacancy rate rose by less than 2% in the teeth of a global pandemic and enforced lockdowns. I find the figure a remarkable, if a little surprising, testimony to people trying their best, and surviving.
Vacancy rates on their own are of course a very blunt and uninformative tool (as we wrote over a decade ago now). We need the base data (so this commentary is not about collecting vacancy data, which is valuable) but there are so many more informative things we can say about places using it and the types of measures we should have. We can consider sectoral issues, diversity, churn, persistent vacancy, YoY and LfL change, stock (shop unit) shifts and other measures. But these of course do not make a good newspaper headline.
We (retailers, consumers, landlords) are facing a period of huge change and the re-awakening is going to take time. I doubt it will be smooth. I would not be suprised if some things do get worse before they get better, and we may indeed reach “record high headlines” (the potential reimposition of business rates will be a major issue for example, as will rent recovery). But then again, we might not, and there are some hopes for the re-awakening/recovery/re-opening.
As an example, I am hearing of (and locally seeing) quite a lot of local independent businesses opening up, and a better realism of what the stock of store units should be. Both are positive signals of retail change. Maybe we could speed these processes up by targeted investment and replacement and better and faster support for independent retailers?
More than anything perhaps we should focus more on talking up the sector and what it has achieved, especially during the last 15 months or so, and give consumers confidence about their shopping and the retailers they can now access. Constantly saying how bad places are is not going to speed the re-awakening or make it sustainble.