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Retail vacancy rates stagnate amid rising costs

By Don-Alvin Adegeest


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Image: Leeds High Street via Unsplash

The increasing costs associated with running standalone stores are deterring retailers from investing in the UK's high street.

These costs include rent, business rates, and utilities, which have been on the rise in recent years. As a result, retailers are exploring other avenues such as online sales and pop-up stores, which offer more flexibility and cost savings.

The pandemic also accelerated the shift to online shopping, as many consumers have become accustomed to the convenience and safety of shopping from home. Despite this trend, vacancies on the high street have remained unchanged since late 2022, according to research from the British Retail Consortium and Local Data Company.

This suggests that retailers are still interested in maintaining a physical presence, but they are seeking alternative ways to do so. The high cost of operating standalone stores, which often come tied with lengthy leases and high council tax have made it challenging for retailers to invest in traditional brick-and-mortar locations.

Retailers that do have a physical presence on the high street are increasingly focusing on creating unique and engaging experiences for customers. This includes offering personalised services, interactive displays, and immersive experiences that cannot be replicated online.

Another key trend is the growth of pop-up stores and other flexible retail formats, which allow retailers to test new concepts and engage with customers in different ways. These formats can be particularly effective for new or emerging brands that are looking to build their presence and connect with customers in a more intimate setting whilst not having to sign lengthy leasing contracts.

Focus on sustainability and environmental responsibility

Many retailers are also working to reduce their carbon footprint, by increasing their online presence and upgrading their existing store portfolio to adopt more eco-friendly practices. Consumers, too, are increasingly seeking out brands that prioritise sustainability and brands that operate with ethical practices.

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