By guest author Elias Jahshan from Retail Gazette
- 13867 shops have pulled their shutters for the final time so far this year, according to Centre for Retail Research
- This is a 24.8 % on the same period last year
- Non-food retailers have also lost more than GBP 9 billion in sales this year so far
Non-food retailers have lost GBP 9 billion in sales so far this year, which could lead to one in 10 stores never being used to sell goods again, a new report has found.
The Centre for Retail Research also found nearly 14000 shops have permanently closed this year – up almost 25 % on the same period a year ago.
The research centre also predicts as many as one in 10 store sites may never sell goods again.
The findings come as a poll of 400 property executives found more than a third are already changing how their retail stores are used and a further 57 per cent are considering changes.
Property specialists Altus Group’s Global Property Development Trends Report also found that at least GBP 155 million has been earmarked for repurposing assets.
Retailers had already agreed before lockdown that the high street had too many stores, with the shift to online remaining strong.
Those with strong online stores and businesses have managed to maintain sales, although those without have suffered.
Retail floor space, both occupied, vacant and to let, in England and Wales currently stands at 1.35 billion square ft, according to Altus Group.
The Centre For Retail Research said that, although some of the lost retail sales over the lockdown period were now being regained, 13867 shops had pulled their shutters for the final time so far this year – up 24.8 % on the same period last year.
It also found that non-food retailers have lost more than GBP 9 billion in sales this year so far.
Centre for Retail Research director Professor Joshua Bamfield said the longer the work-from-home instruction is required, the bleaker the prospects.
“There is no alternative to repurposing… as much as 10 % of retail floor space might need to be repurposed in the short to medium-term but could be much higher in major cities eventually,” he said.
Business rates, which cover all commercial properties, have not needed to be paid this financial year by retailers, pubs, bars and leisure services.
However, the announcement last week from Chancellor Rishi Sunak on extending the help for struggling businesses did not include an update on the business rate pause.
Instead, he opted to encourage businesses to focus only on “viable” jobs, with a new scheme to top-up workers unable to carry out their jobs due to the new lockdown restrictions.
In the retail sector alone, it is thought at least 125000 jobs have been lost so far this year.
“Long-standing pressures faced by property owners and developers through declining retail rents and failures have now been exacerbated by the pandemic and its evolving impacts,” Altus Group executive director Scott Morey said.
He added: “However, the property industry is recognising opportunities that exist and will seek to repurpose assets during this period of uncertainty and well into the recovery stage.”