UK retail vacancies fall as real wages hit 21-year low

·3-min read
Retail park locations had the lowest vacancy rate across the sector. Photo: Niklas Hallen'n/AFP via Getty
Retail park locations had the lowest vacancy rate across the sector. Photo: Niklas Hallen'n/AFP via Getty

The number of vacancies in Britain's retail sector declined in the second quarter of this year, pointing to a more sustained post-pandemic recovery, according to new industry analysis.

Figures from the British Retail Consortium (BRC) showed the overall vacancy rate fell to 14%, up 0.1 percentage points on the first quarter and 0.5 percentage points better than the same period last year.

This was the third consecutive quarter of falling jobs rates in the industry, with all locations seeing an improvements in vacancy rates, the BRC said.

It comes as regular pay saw the biggest plunge in more than 20 years when rising prices are taken into account, according to the Office for National Statistics.

Between March and May, pay excluding bonuses was down 2.8% from a year ago when adjusted for inflation, marking the fastest rate since records began in 2001.

The figures show workers are feeling further pain as rising prices take a bite out of their spending power.

Read more: UK workers suffer record drop in real terms pay

Shopping centre vacancies fell to 18.9%, down from 19% in the first three months, while high street jobs decreased to 14% in the period, an improvement on 14.1% in Q1.

Retail park vacancies decreased to 10.2% in Q2, a 0.4 percentage point improvement from the first quarter. The group said retail locations had "by far" the lowest vacancy rate.

Vacancy rates in the retail sector. Chart: British Retail Consortium
Vacancy rates in the retail sector. Chart: British Retail Consortium

Regionally and across the four nations, London, the south east and the east of England had the lowest vacancy rates. While the north east, followed by Wales and Scotland, recorded the highest rates.

Helen Dickinson OBE, chief executive of the BRC, said: "Vacancy rates continued to travel in the right direction, with the third consecutive quarter of improvement, though rates remain almost two percentage points above pre-pandemic levels.

"There remains a significant north-south divide, with the north of England, along with Scotland and Wales, having a higher proportion of empty shops, though this gap is narrowing, with greater improvement being seen in northern England."

Vacancy rates by regions and countries. Photo: British Retail Consortium
Vacancy rates by regions and countries. Photo: British Retail Consortium

Lucy Stainton, commercial director at Local Data Company, added: "Vacancy rates have continued to decrease for the 3rd quarter in a row, pointing to a more sustained recovery post COVID which is certainly encouraging.

"That being said, there are a number of economic headwinds facing retailers and consumers alike, including the cost of living increases as well as issues across supply chains. This may mean we see a slow down in new store acquisitions as operators consider what this might mean for their investment strategy.

"In parallel to this however, we will continue to see increased redevelopment activity across the market, with redundant retail space being reviewed for other uses.

Read more: House prices: You need 40 years of income to buy a property in London

"The net impact of both of these phenomenon’s will be the deciding factor in terms of what happens to vacancy rates across Great Britain moving forward."

Separate analysis from the Office for National Statistics showed the number of people in work in the three months to May rose to the highest level since last summer, with another 296,000 people entering the jobs market. That was the largest increase since the quarter to August 2021.

Watch: The biggest job interview mistakes

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting