Special Report: New study paints a gloomy picture of West Midlands’ shopping centres

NEW data has painted a gloomy picture of the West Midlands’ retail sector, with the number of empty shops in the region amongst the worst in the UK.

The region’s shopping centres have the highest rate of vacant units in the country, while the top ten list of the worst performing towns during the first half of this year includes three from the region – Burslem, Stoke-on-Trent and Walsall.

Burslem claims the unwanted distinction of being the town with the highest number of empty shops anywhere standing at 34.3%, an increase of almost 5% on the year. Stoke-on-Trent comes third (28.2%, up 0.5%), with the two locations being split by Newport in Monmouthshire (28.4%, up 0.5%).

Walsall trails fourth with a rate of 28%, up 1.8%. However, the Black Country town is something of an anomaly as it is currently undergoing something of a renaissance with two major new retail developments currently under way which are set to revive the town’s somewhat tarnished image. It has also recently secured a new anchor tenant for its flagship Saddler’s Centre, with department store TJ Hughes taking on the former Argos unit.

The reason it has suffered due to the traditional nature of its high street, which was left decimated a few years ago by the opening of a giant new Tesco and the subsequent migration of shoppers away from the town centre.

Walsall is trailed by Wigan (27.1%), Stockport (26.6%), Bolton (26.1%) and Bootle (26%), suggesting things are just as harsh in the North West.

The only bright spot for the region is Dudley, where there has been a marked reduction in the vacancy rate from one in three units lying empty in 2011 to less than one in five now.

Nevertheless, there is further bad news for the West Midlands, with Wolverhampton being named one of five areas which has failed to see an improvement in its vacancy rates over the past five years. The other areas being Stockport, Morecambe, Dewsbury and Stockton-on-Tees. All five were named amongst the 20 worst performing areas during a study in 2010. The quintet now have the distinction of being the only places still in the top 20 worst performing town centres in H1 2015.

Shopping Centre vacancy is clustered in the range between 11.9% (South East) and 19.6% (West Midlands).

That the data should be produced now, just as Birmingham prepares to unveil its new Grand Central scheme is testament to the dichotomy that exists in the West Midlands’ retail sector.

The data was compiled in a new report by the Local Data Company ahead of its 12th Retail Summit.

The report, ironically entitled ‘Cautious Optimism’ analyses 2,165 towns, shopping centres and retail parks. It provides the most comprehensive insight into the health of the country’s shopping destinations and how they are changing.

The national vacancy rate in the first half improved by -0.2% on the last six months of 2014. This is as a result of over 700 previously vacant units being reoccupied. England has the lowest town centre vacancy rate (11.6%) followed by Scotland (11.8%) then Wales (15.6%).

It also illustrates – if further proof were needed – of the gap between the north and the south.

Of the top ten best performing towns in the country, nine lie in either Greater London or the South East – with the only place preventing a clean sweep being Gretna on the Scottish border. Indeed, the London borough of Highgate is so affluent that it does not have a single empty unit, a situation unchanged on last year.

Matthew Hopkinson, director at the Local Data Company, said: “Cautious optimism is exactly what the latest vacancy rates data from LDC reveals from the first half of 2015. The good news of reducing vacancy rates has run in parallel to better economic performance within the UK, and growing retail sales and consumer confidence.

“The improving vacancy rates across the country has been seen in all location types with improvements of high street units (-0.2%), shopping centres (-0.4%) and retail parks (-1.4%).”

“The devil is however in the detail. At a town centre level there is considerable variance between the best and the worst. The towns with the highest vacancy rates all have around one in four or one in five shops vacant which is a blight for many towns that should not be lost when considering the overall positive trend nationally. Locations such as Newport in South Wales, Stoke on Trent in the West Midlands and Stockport in the North West have had high shop vacancy rates since 20011/12 and in the case of all three are continuing to rise.”

He said many towns were caught in an unenviable Catch 22 situation where persistent vacancy rates meant they could not attract new investment and so facilities gradually spiraled down with more and more retailers quitting and new ones failing to replace them.

“If units are not let within a year then there is a general trend that they will remain unoccupied and this is particularly true for secondary retail parks and small (less than 200 units) high streets. The conclusion from this can only be over supply or the wrong size of space in the wrong location,” said Hopkinson.

“2015 and beyond could start to see further improvements but this is more likely in fewer centres than across all locations. Caution has to be the watch word both in terms of consumer confidence, the impact of any interest rate rise, the impact of currency fluctuations especially on supply chains and finally the explosive growth of certain business types in a fiercely competitive market which has led to talks of a bubble. Only time will tell.”