Fashion, home and non-food retailers have lost £9 billion in sales so far this year, which could lead to one in 10 stores never being used to sell goods again, a new report has found.
The Centre For Retail Research also found nearly 14,000 shops have permanently closed this year – up almost 40% on the same period a year ago – and predicts as many as one in 10 store sites may never sell goods again.
The findings come as a poll of 400 property executives found more than a third are already changing how their retail stores are used and a further 57% are considering changes.
Property specialists Altus Group’s Global Property Development Trends Report also found that at least £155 million has been earmarked for repurposing assets.
Retailers had already agreed before lockdown that the high street had too many stores, with the shift to online remaining strong.
Those with strong online stores and businesses have managed to maintain sales, although those without have suffered.
One of the most eye-catching moments showing the shift was the announcement from John Lewis that it would shut some of its department stores for the first time.
Retail floor space, both occupied, vacant and to let, in England and Wales currently stands at 125,171,104 square metres, according to Altus Group.
The Centre For Retail Research says that, although some of the lost retail sales over the lockdown period were now being regained, 13,867 shops had pulled their shutters for the final time so far this year – up 24.8% on the same period last year – with non-food retailers having lost more than £9 billion in sales.
Long-standing pressures faced by property owners and developers through declining retail rents and failures have now been exacerbated by the pandemic and its evolving impacts
Professor Joshua Bamfield, director at the Centre For Retail Research, says the longer the work-from-home instruction is required, the bleaker the prospects.
He said: “There is no alternative to repurposing… as much as 10% of retail floor space might need to be repurposed in the short to medium-term but could be much higher in major cities eventually.”
Business rates, which cover all commercial properties, have not needed to be paid this year by retailers, pubs, bars and leisure services.
But the announcement last week from Chancellor Rishi Sunak on extending the help for struggling businesses did not include an update on the business rate pause.
Instead, he opted to encourage businesses to focus only on “viable” jobs, with a new scheme to top-up workers unable to carry out their jobs due to the new lockdown restrictions.
In the retail sector alone, it is thought at least 125,000 jobs have been lost so far this year.
“Long-standing pressures faced by property owners and developers through declining retail rents and failures have now been exacerbated by the pandemic and its evolving impacts,” said Scott Morey, executive director at Altus Group.
“However, the property industry is recognising opportunities that exist and will seek to repurpose assets during this period of uncertainty and well into the recovery stage,” he added.