Figures released by the Local Data Company revealed that the retail divide between the north and south of England is growing, with the number of vacant shops in the North now double the number in the South.

Empty shop

But with the overall number of vacant stores across the country falling, the statistics have received a mixed response from people working across the retail property sector.

Retail Week spoke to retail bosses, analysts, property agents and commercial property solicitors to analyse what can be done to decrease the number of stores lying empty and explore the options available to property owners if they decide to switch their usage away from retail.

Melanie Leech, chief executive of the British Property Federation

“If the Government would commit to a full and fundamental review of the business rates system, we would undoubtedly see vacancy rates improve and the North-South divide begin to close.

“Retailers are currently having to pay business rates at 2008 values, which are wildly expensive and hugely out of kilter with current economic conditions. Yearly revaluations of business rates would ensure that they are in sync with the current economic climate and would help lower the cost of business, which in turn would help fill empty units.”

Michael Weedon, deputy chief executive of the British Independent Retailers Association

“The actual story today is the variation between the North and the South. The overall vacancy rate is improving, although the rate at which it will be improving it will take 36 years until there are no empty shops in the country.

“The question is what can be done to help improve the rate. The key thing is encourage shop owners and make sure we don’t do anything to discourage them. Footfall is a critical issue – towns need assistance with footfall. Parking is a big issue and is the difference between in town and out of town. Councils need to promote their towns more by offering free parking and running events.

“There’s a difference between the North and South and that’s reflected in general economic activity – the South has benefited from the housing boom and when people are buying and selling, that helps retailers with people buying DIY, gardenware and furniture.”

James Peasnell, director at retail property agent JP Retail

“This year we’ve seen a real polarisation towards London, particularly in zone three. All the inner London suburbs are seeing a real revival at the moment. Outside London, the big cities and the market towns are doing OK, but in a lot of places, in the South as well as the North, there is very little demand. Councils don’t help because in a lot of areas parking is very expensive. Out-of-town retail parks are continuing to open or expand, offering free parking and taking trade.

“In terms of how to get these empty shops open again, I don’t think there’s a straightforward answer for all because in places like Grimsby there is almost zero demand and it’s very hard to turn that around. Overall there is better demand this year and that will gradually filter out, but some towns will inevitably find it difficult to capitalise on that.”

Paul Turner-Mitchell, retail expert

“We’ve got a scenario where despite active marketing, landlords haven’t found retail interest in their shops. These empty shops are costing landlords millions in business rates. These landlords are better off being removed from the business rates list and instead let them to consider alternative uses such as converting them into residential properties. Empty high streets are preventing investment elsewhere in towns, so councils could be more proactive and make areas more vibrant again, which would create jobs and investment.

“The North-South divide is likely to increase over the next couple of years primarily as a result of the postponement of the business rates revaluations until April 2017. In Greater Manchester, for example, between 2008 and 2013, across the 10 principal retail cores, Prime Zone A rents have fallen by 40% yet retailers are going to be pegged to rateable values that bear no resemblance to current market conditions. There is only so long that business, particularly SMEs, can ride that out.”

Richard Ellard, head of the commercial property team at solicitors Thomson Snell & Passmore

“In terms of the future for empty retail units, there are ‘permitted development rights’ that apply to most retail properties. All it requires is the completion of a relatively straightforward form, so the application process is smaller and quicker than a full planning application, which you would need if you were to demolish the shop and rebuild it as a residential property.  

“However, you can only use this on up to 150 sq m [1,615 sq ft] of retail space – that’s about three one-bedroom apartments – so turning to residential might be an option for some of the vacant units, but not all of them. I’ve not come across too many retail-to-residential schemes and the question is: why not? Old shops don’t make brilliant homes and, in some parts of the country that are affected by empty shops, you tend to find the lack of demand for retail goes hand-in-hand with a lack of demand for housing.”