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UK retail vacancies fall as real wages hit 21-year low

Retail parks had the lowest vacancy rate in the industry. Photo: Niklas Hallen/AFP via Getty

The number of job vacancies in the UK retail sector fell in the second quarter of this year, indicating a stronger post-pandemic recovery, according to new analysis of the sector.

Figures from the British Retail Consortium (BRC) showed the overall vacancy rate fell to 14%, up 0.1 percentage point from the first quarter and 0.5 percentage point better than at the same time last year.

It was the third consecutive quarter of falling employment rates in the industry, with all sites seeing improved vacancy rates, the BRC said.

It comes as regular wages have seen the biggest fall in more than 20 years when rising prices are taken into account, according to the Office for National Statistics.

Between March and May, pay excluding bonuses fell 2.8% from a year ago after adjusting for inflation, marking the fastest rate since records began in 2001.

The figures show that workers are feeling even more pain as rising prices reduce their purchasing power.

Read more: UK workers face record real pay cut

The shopping center vacancy rate fell to 18.9% from 19% in the first three months, while high street jobs fell to 14% during the period, an improvement on to 14.1% in the first quarter.

The retail park vacancy rate fell to 10.2% in the second quarter, an improvement of 0.4 percentage points from the first quarter. The group said retail stores had “by far” the lowest vacancy rate.

Retail vacancy rate.  Chart: British Retail Consortium

Retail vacancy rate. Chart: British Retail Consortium

Regionally and across the four nations, London, the South East and the East of England had the lowest vacancy rates. While the North East, followed by Wales and Scotland, records the highest rates.

Helen Dickinson OBE, chief executive of the BRC, said: “Vacancy rates continued to move in the right direction, with the third consecutive quarter of improvement, although rates remained almost two percentage points above pre-pandemic levels.

“There remains a significant north-south divide, with the north of England, as well as Scotland and Wales, having a higher proportion of empty stores, although this gap is narrowing, with greater improvement seen in the north of England.”

Vacancy rate by region and country.  Photo: British Retail Consortium

Vacancy rate by region and country. Photo: British Retail Consortium

Lucy Stainton, Chief Commercial Officer of Local Data Company, added: “Vacancy rates have continued to decline for the 3rd quarter in a row, indicating a stronger post-COVID recovery, which is certainly encouraging.

“That being said, retailers and consumers alike are facing a number of economic headwinds including the rising cost of living as well as issues in supply chains. This may mean we are seeing a slowdown new store acquisitions as operators reflect on what this could mean for their investment strategy.

“Along with this however, we will continue to see increased redevelopment activity in the market, with redundant retail space being considered for other uses.

Read more: Property prices: It takes 40 years of income to buy property in London

“The net impact of these two phenomena will be the deciding factor in terms of what happens to vacancy rates across Britain in the future.”

A separate analysis by the Office for National Statistics showed that the number of people in work in the three months to May rose to its highest level since last summer, with 296,000 more people entering the labor market. This is the largest increase since the August 2021 quarter.

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