High Rents and Discount Stores Drive Brick-and-Mortar Struggles

  • 16% of UK shops are empty according to FOI data
  • 50,000 units in 418 councils remain closed
  • Business rates contribute to the increase in empty units
  • Retail market’s economic output is £92.8bn and employs 2.8 million people
  • Empty units impact local government finances
  • Traditional retailers face high rents and occupancy costs

Duff and Phelps’ research reveals that nearly 16% of UK retail and shop outlets are vacant, with over 50,000 units in 418 councils remaining closed. The Office for National Statistics (ONS) reported 319,000 retail businesses in 2018, estimating a void rate of 15.9%. Business rates, accounting for 2.3% of brick-and-mortar retailers’ costs and only 0.6% for online retailers, contribute to the issue. The UK retail market, worth £92.8bn and employing 2.8 million people, is under pressure as local authorities face lost rental and business rates income. Philip Duffy, Duff and Phelps’ managing director, warns that traditional retailers struggle with high rents and occupancy costs due to discount stores and online sales.

Factuality Level: 8
Factuality Justification: The article provides accurate information from a reputable source (Duff and Phelps), uses relevant data (FOI request to local councils and ONS statistics), and presents a balanced perspective on the impact of empty retail units on both businesses and local authorities. It also includes expert commentary from Philip Duffy, managing director at Duff and Phelps.
Noise Level: 3
Noise Justification: The article provides relevant information about the number of empty retail units in the UK and identifies business rates as a contributing factor. It also discusses the impact on local authorities and mentions potential future trends. However, it lacks in-depth analysis or solutions to address the issue.
Financial Relevance: Yes
Financial Markets Impacted: UK retail sector
Financial Rating Justification: The article discusses the high percentage of empty retail outlets in the UK and its impact on local councils’ finances, which affects businesses and the overall economy.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no mention of an extreme event in the last 48 hours.

Reported publicly: www.retailsector.co.uk