Retail space is becoming a Waste Land

That leaves 515 still closed for the foreseeable future. Shuttered stores do nothing for their immediate retail environment. The news channels and trade websites daily report more corporate deaths adding to this pile of unwanted real estate.

As Retail Week’s editorial so passionately expounded two weeks ago, some of these failures represent abuses of the pre-pack administration system, where only the most unprofitable stores are handed back to landlords.

They and suppliers carry the cost of creating a leaner rump. But for the most part, each administration adds to the toll of unwanted stores. A dispassionate sage might argue that this represents a long overdue correction of the over-building of retail space in the UK. And that it is for the most part the least modern space that is jettisoned, leaving an overall healthier body of stores.

I cannot be that dispassionate, and find tumbleweed blowing across empty car parks somewhat depressing. In November I passed a small retail park north of London. That particular landlord has now achieved a full house (but an empty park): the three sheds comprised Rosebys (shut), MFI (closed that week), and Land of Leather (presumably now also shut).

Disappearing neighbours will cause pain for otherwise healthy retailers. Consumers will quite understandably be attracted to locations that are fully let, over those with gaps between stores trading. Even the slightest knowledge of the property market would indicate that it will be harder to dispose of a lease from a retail park composed of the dead and living dead, than a vibrant one. So performance in those stores will take a pounding through no fault of the retailer’s operational staff. Only a possibly favourable rent review at some stage in the future offers a partial palliative.

Overlaid on the fallout of corporate failures is the doughnut of destruction accompanying each opening of a major centre. The recent addition of high-quality retail space in developments such as White City, Liverpool and Leicester must be adding to the rate of store closures in their retail hinterlands.

So voids are rising – 9 per cent currently on secondary locations – but who knows where it will end?

TS Eliot said in The Waste Land: “The road winding above among the mountains/Which are mountains of rock without water/If there were water we should stop and drink/Amongst the rock one cannot stop or think…”

There appears plenty of rock and precious little water right now.

Paul Smiddy, Head of retail research, HSBC