LDC warns rise of online sales spells decline of high street shops

Tuesday, 07 February 2012 11:29

Britain’s high streets are set to decline even further in 2012 as a result of the economy and the rise in online shopping.

More and more people are becoming internet savvy and the perception is increasing that the best deals are available online. This combined with the biggest reduction in disposable income for more than 50 years is accelerating the decline of the UK high street.

A report from the Local Data Company (LDC) says that the number of empty shops is set to rise in 2012 due to the combination of a rise in online sales, increasing unemployment and weak consumer confidence.

LDC reports that vacancy rates for UK shops were stable in 2011 at 14.3 per cent but there are big regional differences.

Stockport has the highest rate of empty shops at 30 per cent, whilst Hanley has 25 per cent shop vacancies. Meanwhile, St Albans has the lowest level with just 8.2 per cent of shops empty.

In 2011, a number of household high street names went out of business including Jane Norman, Barratts, Habitat and Focus DIY.

Business rates in April are set to rise by 5.6 per cent which could cause further casualties in the retail sector.

Stephen Robertson British Retail Consortium Director General said: “The scale of retail failures since Christmas and number of shops standing empty show the effects of high costs and weak demand on retail businesses and the people and places that rely on them.

"Recommendations on town centre management, investment and access which have come from the BRC and the Portas' review can help but they are not enough.

"The Government should be keeping down the cost pressures it is responsible for. Most urgently, it should reduce the eye-watering 5.6 per cent business rates increase it plans to impose in April."

The report revealed that although the number of retail outlets that have moved out of the town centres to out-of-town locations had risen from 28.1 per cent in 2000 to 31.5 per cent in 2011, the main cause for the decline in town centre shops was the increase in online shopping where overheads are less and prices often cheaper.

Research conducted by retail consultancy Verdict on behalf of LDC shows that online sales doubled from 5.1 per cent in 2000 to 10.2 per cent in 2011 and the trend is set to continue.

Liz Peace, chief executive of the British Property Federation said that turning empty shops into new homes would be a practical idea.

She said: "Bringing empty shops back into use by allowing conversion to residential is one that could be implemented quickly and easily."

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