MSCI figures have suggested that 43 per cent of shopping centre leases and 37 per cent of high street tenancies are due to expire by the end of 2015 – a worrying prospect after renewal rates plummeted to nine per cent less than two years ago.
This prediction may mean that the trend of falling vacancy rates may reverse, and high street stakeholders need to realise that it’s increasingly unlikely that “big names” will continue to dominate town and city centres.
“It is my view that there is a disconnect between the ambitions of many “placemakers”, for instance to attract big name retailers to their towns, and the current trends, which indicate clearly that those big names are withdrawing from town centres at quite a pace, especially in smaller, market, and rural towns,” said Clare Rayner, founder of the Future High Street Summit.
“Figures from LDC/bira show that high street vacancy rates have dropped a little; but the national averages mask the detail, which interestingly show that there has been a net gain in independents and a loss in multiples. To me it’s clear that smaller businesses and independent retailers are the ones who are keeping our high streets alive – so it is essential they get the support they need from the relevant authorities and place managers.”
The message is clear: placemakers must encourage businesses that provide for the current and future needs and wants of the local community, and to accept that long-term occupancy of high street units by chain stores is already a thing of the past.
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The change in the number of types of outlets is a function of the difference in the use of the high street by consumers that has been brought about by the Internet.
Diane Wehrie, marketing and insights director at Springboard research, said: “It is likely that multiples will rationalise their store networks, particularly in the light of the increase in the number of retail leases that are due to expire.
“However, when consumers do visit, they are making it more of an event, spending longer in the town centre and so demand greater diversity for something unique to make their trip an event, and therefore special, offering independents opportunities.”
This was echoed by Zifa Sadriyeva, founder of Zeta Economics, who said: “High streets are under increasing pressure from internet retailing, so a good mix of uses is essential to create differentiation, better shopping experiences and thus expand catchments.
“We could expect better prospects this year for restaurants, cafes and coffee shops if food price inflation will be as slow, or perhaps as negative, as the Bank of England is forecasting. Where the high street offer is well-balanced, retailers may benefit as a result.”
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