High Streets and Town Centres are in the news again today – most probably because of the report from The Centre for Retail Research which says (amongst other things) that 1 in 5 shops will go by 2018. ( Link here: http://www.retailresearch.org/index2.php ).
There are many reasons why some (or many) of our high streets and town centres are failing or struggling: some are structural and some are related to the state of the economy, although it could be argued that the recession has disclosed structural problems which 15 years of growth had hidden.
But, one issue which hardly anyone talks about, but which I have considered for a while, is that the rents in too many town centres are too high. During the long retail boom landlords took too much of the surplus and they are being slow to understand that more and more shops can no longer pay these high rents. If rents were more sensible more shops would survive, and new retailers could try the market.
I can’t find the details but it would be really interesting to know how much shops are payng in rent compared to their turnover and profits. I suspect that it is too high a proportion and not sustainable, but landlords are unwilling to reduce rents as this is likely to break their banking covenents and lending agreements; but evenually landlords will have to adjust to the new reality and some will have to go bust.
To help me with my ‘theory’ I would love to know how much rent you pay compared to your turnover. If you are a retailer why not email me direct with your rent and turnover (or what % of your turnover your rent amounts to). Of course, I will not pass on any detail on who you are or where you are located. Tell me what sort of location you are in: out of town; market town; city centre; London suburb etc, so I can see if there are any patterns. And why not mention Business Rates as well?
My direct email is: email@example.com