UK high street continues to suffer despite improving shop vacancies

Shopper numbers dropped again in January, though the 1.6% decline was not as bad as the previous quarter's average but a worse start to 2018 than seen last year.

The British Retail Consortium's latest footfall and vacancies survey showed January's drop compared well to the quarterly average fall of 1.8% at the end of 2017 but was worse than the 1.3% decrease seen a year before and well below the twelve-month average decline of 0.7%.

High street footfall fell 1.9% over the month, a heavier fall than the 0.8% drop seen twelve months earlier, but still below the quarterly average of 2.1%, and shopping centre footfall declined 3.1% - deeper than the quarterly average of 2.8%.

Retail park footfall reversed 0.9% in January, worse than the average three-month decline of 0.2%. There was regional variance however, with the South East and West Midlands seeing strong growth in retail footfall at 4% and 3.3% respectively.

Overall, all regions showed a drop in footfall in January, with Scotland seeing the sharpest decline in the UK at 4.6%. The South West and the East also posted declines of 2.6% and 2.5% respectively. The Greater London area saw the reduction in footfall ease from December's decline of 3.7%, but still posted a 1.2% year-on-year fall.

Helen Dickinson, chief executive of the BRC, said, "January painted a picture of divided fortunes with a slight improvement in town vacancy rates but decline in shopper footfall. The latter fell in line with the underlying trend of reduced customer activity in shopping destinations, compounded by the squeeze on discretionary spending. Meanwhile retail sales continue to be buoyed by inflation, masking the lack of real growth."

Diane Wehrle, marketing and insights director at Springboard, which co-authored the January monitor with the BRC, said, "Retail parks clearly now fulfil a wider role for shoppers; yes, they are convenient and functional shopping locations, but are buoyed by the continuing growth in online spending. Not only are they efficient click and collect points, but their attraction is enhanced by a wider offer, embracing hospitality. Herein lies the lesson for stores in urban locations of high streets and shopping centres; their longevity is contingent upon their ability to embrace all steps of consumers' path to purchase, which implicitly necessitates a first class click and collect experience."

The national town centre vacancy rate dropped from 9.3% in October 2017 to 8.9% as of 27 January, largely due to a 5.6% reduced vacancy rate across Greater London, as well as falls seen in Northern Ireland and Scotland of 14.3% and 9.2% respectively.

"If we look beyond the seasonal distortion, the pressures to rationalise and downsize store portfolios are continuing to build as structural and technological change gains momentum. Given that planning applications for new shops have fallen for the ninth year in a row, the mounting cost of property taxation will inevitably mean more empty shops on the high street," Dickinson continued.

"Retailing is about digital and face to face interactions with customers and how the different channels complement each other. Having a business tax system that works to support that, not undermine it, is what the country needs and what we remain committed to work in partnership with government to deliver," she concluded.