High vacancy rates in NI overshadow positive footfall figures
According to a recent report from the Northern Ireland Retail Consortium (NIRC), despite the rise of footfall on NI’s high streets, high vacancy rates continue to overshadow retailer’s celebrations.
The study, compiled from research between the NIRC and Springboard, surveyed the period between 30 December 2018 – 26 January 2019.
Researchers found the footfall in NI continued to increase in January, at an accelerated rate of 3.9 per cent, which is up from 2.2 per cent in December 2018. This is the fourth consecutive month of growth, and the largest growth out of all UK regions.
At 4.7 per cent, Northern Ireland High Street footfall growth picked up in January, while Shopping Centre footfall returned to growth by 1.7 per cent, ending fifteen consecutive months of decline in this shopping location.
The town centre vacancy rate for Northern Ireland was 14.0 per cent in January 2019, an increase from 13.6 per cent in October 2018 and above the 9.9 per cent UK average vacancy rate.
Director of NIRC, Aodhán Connolly said: “The excellent start to 2019 in footfall continues with a four month run of growth and a rise in eight out of the past twelve months. And while the 3.9% increase beats both the three and twelve month averages retailers are finding it hard to celebrate in the face of so much uncertainty for their industry.
As well as obvious concerns on Brexit, they also have serious concerns about the outdated business rates system in Northern Ireland which is unfairly weighted against retailers who pay 24% of business rates despite being only 12% of the economy. We have already seen rises in the district rate from Derry and Strabane Council as well as Belfast City Council, with others sure to follow, and we have no idea yet of when the regional rate for business will be struck. This uncertainty and these rises make Northern Ireland a less competitive place to do business. We need a quick declaration of the NI regional rate and we need to see progress from the Department of Finance on rates reform immediately. This is now mission critical for retailers and one of the reasons our vacancy rate remains 4% above the national average.”
Meanwhile marketing and insights Director of Springboard, Diane Wehrle added: “The good news for Northern Ireland is that its footfall performance is defying the UK trend, with January recording a positive result for the fourth consecutive month. And unlike the UK as a whole in January which was typified by a significant rise in the first week and then declines for the remainder of the month, in Northern Ireland footfall rose in the first three weeks which averaged +4.6%, and it was only in the last week that footfall declined by -2.2%
“Despite the fact that the vacancy rate is a lagged and sticky indicator – trailing sales and footfall trends, and subject to the vagaries of lease lengths – in January it reflected the ongoing challenges faced by retailers and recent store closures. Not only did it slip slightly to 14% from 13.6% in the previous quarter, it also remains the highest in the UK.”
