Scots retailers urge rates review as 6,000 storefronts shut across UK

A rise in the number of shops in lying empty in Scotland has sparked a call from retailers for a review of business rates.

Britain has lost 6,000 storefronts in five years amid Covid and cost-of-living pressures and “crippling” business rates, according to figures.

The highest vacancy rates were in the North East and the Midlands, followed by Wales and Scotland, according to the BRC-LDC Vacancy Monitor.

The Scottish Retail Consortium (SRC) wants the Scottish Government to reconsider imposing an increase in rates in the next budget as figures suggest the number of shop vacancies rose to their highest level in 18 months in the second quarter of this year.

According to figures released by the SRC and the Local Data Company, the overall vacancy rate reached 15.9% in the second quarter, with shopping centre vacancies worsening to 20.7% from the previous quarter and high street vacancies moving to 15.1%.

Only retail parks saw a slight improvement, with the number of vacancies dropping to 9.4%, the figures suggest.

David Lonsdale, director of the SRC, said: “These are cheerless figures for retailers with physical bricks and mortar premises and for the health of Scotland’s retail destinations.

“Scotland’s shop vacancy rate nudged up in the second quarter and reached its highest level in 18 months, once again sitting above the UK average rate.

“The proportion of empty units is a quarter higher than three years ago, underlining the toll wrought by the pandemic and subsequent costs crunch.”

“The troubling increase in empty units wasn’t universal across all destinations, however, with retail parks seeing an improvement despite a further deterioration in shopping centres and on high streets.

“This underpins the need for concrete action from policy makers to keep down the cost of operating premises.

“With stores here missing out on rates relief available to their counterparts in Wales and England, Scotland’s shopkeepers will be looking to ministers and their tax advisers to get a grip on the onerous headline business rate and to deliver on the Government’s ambition to use business rates to boost business.

“After all, the business rate is at a 24-year high and Government forecasters have pencilled in a chunky uplift for next spring which, if implemented, would add £34m to retailers’ rates bills.

“The finance secretary must carefully assess the impact on firms and hard-pressed retail destinations when she comes to set the business rate in the Scottish budget.”

Lucy Stainton, commercial director of the Local Data Company, said: “The headline findings from Q2 are unlikely to have come as a surprise to anyone, with economic pressure from rising interest rates and inflation already mounting as the year began.

“Current challenges to business have been compounded by tightening discretionary spend and a dip in confidence among customers.

“The economic headwinds that have made the headlines have filtered into the data, reflected in a slight rise in the overall vacancy rate.

“The high street has seen some of the most notable impacts, with rising rents and increased competition putting pressure on small and independent businesses, who may struggle to meet high operating costs.

“Across all location types, vacancy has reached critical levels, highlighting an ever-increasing need to redevelop units to breathe life back into retail destinations.

“With the continuing trend in mind, we do not foresee any improvements to vacancy rate in future. However, given that the latest rises in vacancy have not been particularly significant, we anticipate that any increases in the near future will be gradual.”

A Scottish Government spokesperson said: “Any decision on non-domestic rates for 2024-25 will be made as part of the budget later this year.

“The Scottish Government has set out a strong non-domestic rates package in 2023-24, including the most generous rates relief for small businesses anywhere in the UK, taking over 100,000 properties out of rates all together.

“As part of this, it is estimated that around half of properties in the retail, hospitality and leisure sectors in Scotland will pay no rates this year.”