Retail planning applications plummet as sector feels strain
Planning applications for new retail shops has plummeted in the last year according to new data, as the sector feels the pressure of rising operational costs and reduced consumer demand.
Figures from peer‐to‐peer secured property platform Lendy show a 15% decline in the number of planning applications for new shops across England and Wales in 2017‐2018.
This is reflective of tougher trading conditions, as just over 6,000 applications were made in the last year, compared to more than 7,100 the year previously.
Rising competition, a shift to online shopping and reductions in customer spending are all linked to more insolvency cases occurring in the retail sector.
Insolvencies in retail climbed by 7% between 2016‐2017 and 2017‐2018 with several high profile companies closing their stores, entering administration, or restructuring.
The number of department stores across England has also dropped by a quarter in that period, while major developer Hammerson has revealed its intentions to cut its exposure to high street retail premises by 20%.
Declines in planning applications were noted across the UK and were especially apparent in the major cities.
Sheffield and Newcastle noted a drop in applications of 53% and 46% respectively, while in the capital, the borough of Kensington and Chelsea saw a 39% fall.
Lendy CEO Liam Brooke said falling demand is “systematic of the issues the retail sector is having to combat” and warned that developers are taking stock of their assets.
Digital shopping is placing pressure on the high street and businesses need to innovate in order to keep trading effectively.
In some instances this can involve restructuring, while in others disposing of assets or an insolvency procedure may be the only step forward.
The key for any business facing financial issues is to act quickly and to seek advice on the most appropriate course of action.
By Phil Smith