More than 200 UK shopping centres are in danger of collapsing into administration as major ‘anchor stores’ decline.
According to the National Retail Research Knowledge Exchange Centre’s Retail Analyst Nelson Blackley, small towns are in danger of “catastrophic” complications as hundreds of shopping centres are on the brink of collapsing.
A number of factors have contributed towards this, including the demise of anchor stores such as BHS, TJ Hughes, House of Fraser and Toys R Us, as well as, the rise of online shopping.
“If the major anchor store moves out, that has a halo effect on other stores in that centre. It’s a downward spiral and you can’t fill shopping centres with nail bars and vape shops,” Mr Blackley said.
Currently, many at-risk centres are owned by US private equity firms. Consequently, if some of the smaller centres that serve towns close, this could potentially have an irreversible impact on those communities and the business rate tax base across the county.
Recent research published in the Financial Times estimates that £2.5 billion worth of shopping centres and retail parks are up for sale in towns and cities across the UK which, again, sets a negative tone across the whole sector.
Blackley believes that, should the centres fall into administration, this could result in increased vandalism and crime in the affected towns.
At present, the retail sector contributes approximately 25 per cent of the Rating List for England and Wales, with this in mind the nation could face some real issues within the retail sector and local authority revenues in the long-term.