Looking at how businesses have performed in terms of location type, sectoral speciality and business model, the report, created in partnership with the Local Data Company, uncovers some significant trends. 

“Multiple themes are emerging, including our role to promote and support ethics and sustainable practices, a seismic shift to digital, significant supply chain disruption and how operators can protect profitability,” says David Scott, Head of Retail and Leisure at the bank. “Physical retail is also experiencing real turbulence, with vacancies rising to record levels throughout 2021. As the rent moratorium ends, the relationship between landlord and tenant becomes even more important, and the willingness to work together is key to future success. 

“Despite these challenges, there are positives on the horizon. History has shown us that retail and leisure are cyclical. The sector survives by providing the very best customer experience, seamless service and, most of all, pivoting and embracing change. This ability to adapt and modify will always create a competitive edge.”

Here’s a rundown of some of the most important trends identified in the report.

Across the UK, vacancy has risen from 11.8% at the start of 2015 to 14.5% in H1 2021. This, however, is only part of the story: vacancy rates decreased from 2015 until H2 2017 and have increased ever since.

This recent upward trend has been reflected in business resilience: 74% of occupiers in the retail and leisure sector were able to remain trading for three years, including during the pandemic. 

At 76%, the same survival metric was the highest in small town centres. Large town centres scored an average of 72%, where big brands have consolidated their stores in recent years. In city centres survival rates average at 71.6%.

The most resilient towns had, on average, a larger percentage of independent occupiers. This stood at 72.6%, and the GB average was 65.6%.

Throughout the pandemic, commuter towns remained resilient as many people worked from home. Commuter towns surrounding London experienced a 1.5% increase in vacancy rates since the first half of 2019. Vacancy rates across city centres increased by 3.9% since H1 2019 and reached 17.5% in H1 2021. Vacancy rates may rise further after April 2022, when the rent moratorium and rates relief come to an end.

Compared with shopping centres, high streets have remained resilient in recent years, supported by independent occupiers. Shopping centres have been hit the hardest during the pandemic, when vacancies increased from 14.2% in H1 2019 to 19.4% in H1 2021. Shopping centres have experienced the loss of major brands such as Debenhams, House of Fraser and Topshop, and the 60 most resilient towns were less exposed to these businesses.

The top risers:

• Barbers

• Beauty salons

• Cafes and tea rooms

The three highest decliners:

• Banks and other financial institutions

• Pubs and inns

• Bookmakers

Of all retail brands, Tesco has the highest three-year occupancy survival rate at 99%. In the 15 brands topping the list of survivors are also ASDA, Sainsbury’s, Morrisons and Iceland. Supermarkets were one of the winners of the pandemic, as they remained open during all three lockdowns.