Vacancy rates look set to rise again this year, with Greater London and towns close to new shopping centre schemes identified as potential hot spots.
Although footfall grew marginally in February, it has declined across the UK in the past year, with the North and Yorkshire, the East and the Southeast registering the three biggest drops.
Research by footfall monitoring firm Springboard suggests vacancy rates follow this trend, albeit at a later period. As a result, more stores are expected to close or go bust in the coming months.
Matthew Hopkinson, director of the Local Data Company, told Drapers that high streets near to “shiny new all-inclusive retail leisure destinations” were at particular risk. He highlighted the Trinity Leeds scheme as likely to damage businesses in Wakefield, Huddersfield, Pontefract, Sheffield and Wolverhampton, adding that Liverpool One was already affecting Chester,Warrington and Wigan.
He also noted that Greater London and the Southeast were now looking more vulnerable.
“The closure profile of chains in 2012 suggests there will be a significant rise in the Southeast – consolidation in an area that was always seen to be in a bubble,” he said. “That’s what I’m sniffing out of the data at the moment.”
Diane Wehrle, research director at Springboard, said Greater London was at greater risk than the capital’s centre or the Southeast more broadly as it had tougher competition – in the form of Westfield London and Westfield Stratford – while simultaneously suffering from a lack of investment.
“Greater London has seen bigger drops in footfall, with the Westfields drawing trade away from places like Harrow, Wembley and Ealing,” she said. “It’s much more vulnerable than it was.”
Werhle added: “We are clearly seeing that where footfall is lower than average, vacancy rates are higher – if I were an occupier, I would be alert to town centres in these regions.”
Mark Williams, chairman of industry group the Distressed Retail Property Taskforce and partner at asset manager Hark Group, described it as “simple maths”. “The stress [in other parts of the country] is yet to be seen in London – but it will hit the suburbs eventually,” he said.