Although many town centres have benefited from a rise in consumer footfall and an ensuing increase in retail spending, the issue of high vacancy rates remains very much a reality for numerous locations nationwide, with business rates often cited as a contributing factor. In Northampton, for example, the number of vacant units in the town centre has risen to 83, after enjoying a few years of relative stability.
According to a report conducted by local newspaper the Northampton Chronicle & Echo, the number of empty units has now reached the highest level since its annual town healthcheck began in 2009. This is particularly concerning as, in most other areas around the country, this trend has reversed thanks to retailer growth programmes in the years since the end of the recession.
The town centre’s Grosvenor Shopping Centre has been a particular victim of store closures, with owner Legal & General revealing that there are now 12 empty units at the retail destination. This is a net figure of five higher than when the report was conducted in 2014, with six clothing outlets closing in the past year and only two – Next and Primark – coming forward to take their place.
Northampton Borough Council cabinet member for enterprise, planning and regeneration, Councillor Tim Hadland, believes that the arrival of these two brands may actually explain the increase in vacancy rates.
He says; “If you get Primark and Next coming in that will inevitably change the centre of gravity in a shopping centre.
“Next and Primark are clearly sucking up some of those clothing pounds and that is bound to affect competitors.”
However, this claim was somewhat refuted by Ian Ferguson, the director of Partnerships for Better Business (DFBB) and leader of Northampton’s Business Improvement District, who believes that a wider national trend is the root cause of the past year’s closures. Business rates have had a negative effect upon shopping centres in particular, he insists, due to many tenants often being hit with higher bills than by those operating High Street units.
Mr Ferguson says; “Shopping centres across the country have got the highest proportion of vacancies: about 15 per cent of all units in shopping centres are empty.
“But the current business rates are based on rateable values drawn up in 2008, before the recession hit.
“It means the rate bills people are paying are pretty steep in today’s economy, compared to a time of boom; they can be anything up to 40 per cent on your turnover – that’s a huge weight around the necks of retailers generally.”
Indeed, it seems that the high rates inflicted upon shopping centre tenants may have had an impact upon vacancy rates in Northampton, as the town’s Abington Street has only seen a net single closure in the past year. What’s more, a number of new retailers are set to move into the town’s main shopping stretch in the coming months, indicating that next year’s report may be a little more positive.
On the other hand, if Mr Ferguson is correct, shopping centres may have to wait until the Government’s review into the business rates system before they can enjoy the level of rising occupancy rates currently being experienced by many high streets nationwide.
