At the time of writing, retailers up and down the land are receiving their quarterly rent demands and, after a torrid trading quarter, many of them will be hard pushed to make the payment.
According to the British Retail Consortium (BRC) this is the toughest rent quarter day for 18 years, coming as it does on the back of a dismal Christmas and a sharp slowdown in consumer spending. Understandably, the BRC has called on landlords to show greater flexibility and has renewed the call for monthly payment terms, labelling the rent quarter day an “ancient anachronism” and issuing a guide for retailers on how to negotiate a monthly rent (at www.brc.org.uk/rentmonthly).
Landlords have their own challenges, of course, with alarming drops in the value of their property portfolios in recent months. But some have already realised that taking a hard stance that could lead to yet another empty unit will only compound their problems. A buoyant retail sector is essential to the health of the commercial property market.
That said, even having the most generous and flexible of landlords won’t save some retailers. According to the BRC, the so-called ghost town phenomenon, where retail unit upon retail unit is boarded up, is on the rise, and about 140,000 shops could be closed by the end of this year, resulting in 200,000 job losses.
I suspect we will see some of the 140,000 predicted closures sooner rather than later, but let’s hope with a bit of co-operation on both sides, retailers and landlords can minimise that figure.
On the upside, at the time many retailers will be reading this, another significant day will be upon us – pay day – although I fear it may fall a little too late for some.