Warning over future of Scottish high streets amid hybrid working move - as figures reveal festive pop ups filled empty shop units in December

Festive pop ups such as Christmas shops and food outlets gave a glimmer of hope to the beleaguered Scottish high street as the number of empty shop units fell, despite increased Covid restrictions.

The shop vacancy rate decreased to 16.1 per cent in the final three months of 2021, from 16.4 per cent in the third quarter of the year, according to figures from the Scottish Retail Consortium (SRC). However, it was 1.7 percentage points higher than in the same period in 2020 and experts warned continued working from home and “hybrid working” could “exert a heavy toll” on town centres.

Shopping centre vacancies also fell to 20.4 per cent from 21.4 per cent three months earlier, while retail park vacancies decreased to 12.6 per cent in the final three months of the year, down from 13.4 per cent in the third quarter. It remains the location with the lowest rate.

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David Lonsdale, director of the SRC, said: “Scotland’s shop vacancy rate marginally improved in the final months of 2021 following six successive quarters of deterioration. It was a small, but nonetheless welcome, improvement aided by pop-ups and temporary lets deployed in the run up to the all-important festive trading period.

Shop vacancies in Scotland were lower in the last three months of last year.

"That said, these figures offer few crumbs of comfort. Too many stores aren’t in use and the vacancy rate has remained above 16 per cent for a third successive quarters. The volume of empty units is especially prominent in Scotland’s shopping centres.”

Mr Lonsdale added: “The fallout from the pandemic continues to exert a heavy toll on retail destinations, and a sustained shift towards hybrid working could make it trickier for store vacancy rates to ever fully recover. The extent to which retail remains the cornerstone of our town and city centres and can continue to employ almost a quarter of a million Scots will be influenced by decisions made by policy makers.”

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Lucy Stainton, director of the Local Data Company, which co-authored the report, said: “Vacancy rates are a strong barometer of the health of our high streets. With this in mind, it is very encouraging to see the increase in empty units finally stabilising after such a sharp rise over the past two years.

"This is the first real indication that the most significant structural impacts of the pandemic are potentially at their peak for certain regions, and operators, landlords and local government alike can start to rebuild after a particularly turbulent period.”

Ms Stainton said while many chain and leisure operators were still reducing store numbers, there had been a growth in the number of new independent businesses.

She said: “This is particularly key to note as having more independent operators alongside larger brands creates more diverse and entertaining spaces for consumers, which will further bolster attractiveness and therefore recovery.”

Ms Stainton added: “Landlords, and place-makers more generally will need to closely consider how the needs and wants of local consumers might have changed post-pandemic, and align with operators who are active and meet their demands such that the first signs of recovery continue.”

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