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Local Data Company launches first Openings and Closures Summit

On 16 October 2013 the Local Data Company (LDC) launched its first ‘Openings and Closures Summit’ at an event hosted by Hogan Lovells.  The LDC presented its findings on property occupancy rates by multiple and independent retail and leisure businesses divided by type, geography and location.

This was followed by a panel discussion chaired by Damian Wild, editor of Estates Gazette.  Panellists included Simon Danczuk MP, BBC correspondent Samantha Fenwick, Calum Ewing of Metro Bank, Michael Weedon of the British Independent Retailers Association, property researcher Dr Karen Sieracki and Mathew Ditchburn of Hogan Lovells.

Key conclusions from the summit were that:

  • There was net growth overall in the first half of 2013.
  • The number of businesses opening and closing increased significantly in the first half of 2013. This was attributed to a material increase in business instability since the corresponding period in 2012.
  • UK-wide, the total number of openings and closings in the first half of 2013 was more than double that for town centres alone at 48,693, suggesting that instability is not confined to the high street.
  • Independents grew by 0.34% compared with multiples which declined by 0.18%.  Some panel members felt that this indicated material structural changes occurring to UK retail locations with a decline in comparable goods retailers unable to compete with online shopping.
  • The greatest net change in the first half of 2013 was in retail parks (with occupancy rates growing by 1.71%), followed by the high street (0.21%) and shopping centres (0.1%). By contrast, standalone shops and retail parades showed a net decline in growth of 0.1%.
  • By sector, in the last two years the most growth has come from the value sector (12.4%). Pawnbrokers, payday lenders and betting shops (17%), food stores (17%) and health and beauty (10.4%) also showed strong growth. Decline has primarily come from the digitally exposed sectors including videos, computer games, CDs and DVDs, bookselling and newspapers (13%).
  • Business rates remain one of the most significant obstacles to new entrants into the retail sector.

Commenting on the findings, the LDC’s Matthew Hopkinson said “Knowledge of and the ability to respond to these changes lies at the heart of the debate around the future of physical stores in Great Britain”.

Panellist Simon Danczuk MP said “These figures show that major chains are continuing to reduce their presence on the high street and it is small businesses that are picking up the slack.”

Mathew Ditchburn of Hogan Lovells commented on the findings that “the multiples are leaving the high street … creating an opportunity for the independents to move in …. .”

The findings of the LDC show that the high street remains in a state of flux which may settle down during a period of sustained economic growth.  More promising however are the increased occupancy rates in retail parks, the high street and shopping centres.  It is to be hoped that the decline in the digitally exposed sectors has now bottomed out although it remains to be seen whether stand-alone shops and retail parades can weather the storm.