According to research recently conducted by commercial law firm EMW, application numbers for the development of new retail stores has fallen 9% from 7,360 to 6,700 in the last year. This is a further drop of 44% in the peak period p in 2008-2009, prior to the recession when applications were at 11,900.
The company puts this down largely to the loss of market share by high street retailers to e-commerce companies, and it admits that Brexit may also add pressure on the sector. It also cites recent failures of traditional retailers such BHS, Austin Reed and My Local, as being caused, in part, by the continued success of online-only brands.
Aimee Barrable, principal at EMW, commented: “With online retailers continuing to win market share, high street firms have less of an appetite to open new shops, instead opting to develop online services or squeeze extra profits from existing space by changing the shopping experience or re-purposing stores to act more as showrooms or collection points.
“Recent high profile closures will lead to more retail space becoming available on the market. Those retailers still looking to expand their high street presence might look to acquire some of these recently vacated stores instead of applying for any new retail developments. Also, it may be that many retailers wait before committing to any new shop developments until they have a clearer picture of the economy in the aftermath of the Brexit vote.”
“It seems that on-line retailers and those who are more successful at building a complementary online presence make their digital offering a major part of their business model; they see it as key to their success. As a result, more traditional ‘bricks and mortar’ retailers are now putting even greater effort into their online presence instead of looking to expand their property portfolio.”