Viewpoints: What should be done about Britain's empty shops?
- 11 September 2013
- From the section UK
High Street vacancies remain "stubbornly high", according to a report from the Local Data Company. So what should be done about Britain's empty shops?
The report showed that the average vacancy rate in the top 650 British town and city centres was 14.1%, down just slightly from the previous reading of 14.2% taken in February.
Wales had the highest national vacancy rate, at an average of 17.5%, Scotland hit 14.9% and England 14.0%.
Last week retail guru Mary Portas told MPs she had "taken a battering" from critics for attempts to revive High Street shops.
Critics of her review, which focused on encouraging independent start-ups and community-oriented businesses to replace chain stores that had moved to out-of-town locations, said it was too "nostalgic".
BBC News has asked a number of experts what they think should be done about the UK's empty shops.
Liz Peace, chief executive of the British Property Federation
We need to recognise that retail isn't going to be the answer for all High Streets, now and in the future.
Unquestionably the recent economic crisis played its part in the number of empty shops, but there are systemic issues such as e-retailing that aren't going away. We can't put the genie back in the bottle - our shopping habits have changed and High Streets need to adapt too.
We should accept there is just too much retail space on our High Streets, which outside of the core High Street might never return to retail. There's no point grimly hanging on hoping they will one day return. Why not have homes or even community uses such as doctors' surgeries on the High Street?
The government also undoubtedly needs to commit to a root-and-branch review of business rates and a system that ratchets up with inflation each year regardless of the wider economic conditions, and the distortion this creates.
For example, why should the tax system exaggerate the existing cost base and flexibility advantages of an internet retailer over a High Street retailer?
David Boyle, fellow of the New Economics Foundation
Saving High Streets means facing up to the reasons they are suffering - high rents, monopoly power, and subsidised out-of-town shopping. This is what we need to do:
- Have new local High Street trusts which can own key local shops, keep rents affordable and open up the space for community enterprises - and a right-to-buy for shop tenants faced with unsustainable rent increases
- Have a real High-Street-first policy which makes car-based out-of-town developments extremely rare
- Create major anti-trust legislation to break up the monopolies - High Streets need a big 10 of grocery retailers, not a big four. They also need the near-monopoly online retailers to pay fair tax, and face new UK competitors
- Take planning decisions based on which developments maximise the way local earnings stay circulating locally. That means creating jobs with living wages, encouraging local enterprises, and giving them a level playing field against big retailers which pay low wages and suck money out of the local economy
- Cut business rates for businesses making major contributions to local economic diversity in the area
- Detoxify High Streets with new-use classes for betting shops and payday loans - which take money out of the local economy - so that they need special planning permission to set up
Don't let's pretend that High Streets are doomed. They are suffering because distant landlords, loan companies and monopolistic retailers are sucking money out.
High Streets are public, social spaces too. Put local enterprise, and local High Streets, first - make them fun, colourful, creative, energetic and distinctive, using street markets, the arts, history and pageant - and they will revive.
Edward Cooke, director of policy at the British Council of Shopping Centres
Retailers aren't generating the same levels of sales as they had historically, which for other forms of taxation - like corporation tax, national insurance or VAT - has an effect.
But because of the way the business rate system is structured, there's no effect. It hasn't responded to changes in the market, [and] isn't adaptable at all.
The Treasury continues to receive the same amount of money, adjusted for inflation, every year, irrespective of market conditions.
Therefore, even where there is an empty unit and the landlord is prepared to give a lower rent, the cost of occupancy - due to the level of business rates - is preventing these units from being occupied.
The trend definitely is that landlords are reducing rent, reducing the length of leases, contributing to the cost of fitting out a store, all in order to incentivise retailers to take space - but it's not uncommon for retailers [still] not to be able to afford the business rates.
Business rates are calculated based on the rateable value (RV) of the premises at a point in time. [But while] the market determines the costs of occupancy, those properties are being taxed at the same rate despite sales not being what they once were.
So there's a further polarisation between what the government is taking in terms of business rates and what retailers can afford.
The tax is paid by the occupier in theory, but the reality is that often the owner will be paying for business rates - either through reduced rent, or by paying the rates of that retailer in order to keep them there.
This matters [because] if you don't get a return on your investment then obviously you're not going to invest - and [that's] the very thing that many of these towns with empty shops need.
Peter Box, chairman of the Local Government Authority's economy and transport board
The number of empty shops is a reflection of economic difficulties, booming internet sales and changes to the way we shop and relax.
We would love to see all the vacant shops occupied by successful businesses, and councils offer direct support such as small-business rate relief and low rents on council-owned properties for start-ups to help retailers prosper.
But shopping habits have moved on and the nature of the High Street has too.
One of the few things retail experts agree on is that the future of the British High Street is more than just retail. Town centres have to become community hubs encompassing housing, education and recreation, as well as shops.
The challenge is not how we can recreate High Streets as they were but how we drive a positive evolution to ensure they remain at the heart of local communities.
To do this successfully we need a planning system that allows local communities to have a say on how their neighbourhood is used and developed. Councils are pivotal to ensuring the High Street evolves so that empty buildings are used in a way that is good for business and the people who live there, while also considering the long term character and vitality of the area.
Liam Challenger, of the Charity Retail Association
Shopping habits have changed massively over the past 50 years due to the rise of online shopping, supermarkets and out-of-town retail parks; this has had a negative impact on the High Street.
What we need is a vision for the High Street that fits the local people and how they want to spend their money. Charity shops can be part of this - the first social business on the High Street.
Action needs to be taken to help support High Street retailers, especially independent ones, when it comes to business rates.
This tax is placing a huge burden on the High Street; we have seen this figure rise by £175m this year alone.
We need to see more effective partnership working between retailers on the High Street to create a collective retail voice.
Our members are working together with other retailers in some areas to bring in more customers to everyone's benefit - by running joint promotions and events or lobbying local councils on making it easier to park.
Richard Blyth, of the Royal Town Planning Institute
High Streets have always been in a state of flux. Part of their success historically has been that they are extremely sensitive to changing demand. The difference now is that the rate of change is more rapid than it has previously been. The important thing to grasp is that change, not decline, is inevitable.
Starting with the basics, people need to be able to get to and from the High Streets easily and this means adequate and affordable parking, and good connections to public transport.
The offer needs to be an attractive, diverse and distinct one in order to compete with the convenience and cost effectiveness of internet shopping.
Planners believe that we need to be imaginative. High Streets are in the heart of communities and should make them ideal locations for health and education services.
Importantly, there is no "one-size-fits-all" approach. The response needs to be tailored to the local area. There are a variety of tried-and-tested initiatives that have been used and which could play an important role depending on circumstance, including business improvement districts, "meanwhile use" such as pop-up shops, and town centre managers.
Every area is different, and the response needs to be tailored to local need.
Finally, we can all play a role. If we value our local shops, we should use them.
In response to the comments about business rates, a spokesperson for the Department for Communities and Local Government told the BBC: "Small firms and shops are at the heart of our High Streets and local communities, and we are supporting them to help the economy grow. Figures show that the level of small business rate relief has trebled since the general election, because of government initiatives.
"Rate relief in England has risen from £333m in 2009-10, to £507m in 2010-11, to £784m in 2011-12 and now to £900m in 2012-13.
"Postponing revaluation 2015 in England will avoid sharp changes and unexpected hikes in business rate bills for over 800,000 premises, including retail and small shops.
"As business rates are linked to inflation, postponement means there will be no real terms increase in rates over the five years. This provides certainty and tax stability for businesses looking to grow and invest, which helps improve the economy."