Businesses suffering, says North East England Chamber of Commerce

The number of vacant sites across the UK has continued to fall but remains higher than pre-pandemic levels amid fears that falling consumer confidence will test the fragile recovery.

The highest rates were in the North East with one in five shops closed, followed by Wales and the West Midlands.

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The overall vacancy rate across Britain fell to 13.9% in the third quarter, 0.1 percentage points better than the previous quarter and 0.6 percentage points better than the same period last year, the British Retail Consortium (BRC) and Local Data Company (LDC) reported.

John McCabe, Chief Executive, North East England Chamber of Commerce told The Northern Echo: “The North East has seen a reduction in the number of vacancies compared to 2021 however we currently have the highest rate of vacancies in the UK.

“We know from our Quarterly Economic Survey that inflation, energy prices and staff costs are heavily impacting businesses in the North East.

“We need to ensure that business rates in April for small and medium high street businesses do not rise with the current high rates of inflation, which would put further pressure on businesses and harm the region’s economy.

John McCabe (Image: Press release)

“Members especially in the hospitality sector are being heavily impacted by the current cost of living crisis. We have recently heard from a hospitality company which owns three restaurants in the North East.

“The cost of living crisis has driven their product costs up by 30%, and has reduced footfall, with the customers they do have looking to spend less than they otherwise would have. Some buildings are also listed properties, meaning that they aren’t often energy efficient, and cannot have work done to the building to improve this.

“The Government needs to listen to business concerns in the North East and act to deal with the significant economic pressures facing businesses and households in the region. We invite the Government to work with us and our members on seizing the opportunities for growth and tackling the difficulties we face as a region.”

It is the fourth consecutive quarter of falling vacancy rates.

Shopping centre vacancies fell to 18.8%, down from 18.9% in the second quarter, while high street vacancies decreased to 13.9% from 14%.

Empty shops made up 9.7% of retail park outlets, while London, the South East and the East of England had the lowest vacancy rates.

BRC chief executive Helen Dickinson said: “The costs of operating in many towns and cities remains high and demand will be tested by the fragile economy and falling consumer confidence in the lead up to Christmas.

“Higher costs are already pushing up prices and the industry faces a government imposed extra £800 million business rates bill from April 2023. This will force many retailers to make tough decisions about whether to invest in new stores or close existing ones.

“Government should freeze business rates and reform the broken transitional relief system. This will support investment in communities across the country and help keep prices low for consumers.”

Lucy Stainton, commercial director at the Local Data Company, said: “Independent businesses in particular have continued to flourish as consumers remain loyal to their local high streets.

“However, we can’t ignore oncoming economic pressures as consumers face a winter of increased caution and reduced disposable income. Just as the market has started to find its feet, we are now about to face a new round of tests— but perhaps the lessons learned during the pandemic will help chains and independents to weather the coming storm.

“The latest Great Britain figures are encouraging but should still be viewed with real caution, and we would predict that this increase in occupancy could slow as retail and hospitality businesses grapple with a tough winter.”

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