Leisure occupancy rates drop in first half of 2018

The number of occupied leisure units across England, Scotland and Wales has fallen during the first half of 2018 after a long period of growth, according to the latest report from the Local Data Company (LDC). Leisure units, classified by the data researcher LDC as hotels, cafes, fast food, restaurants, bars, pubs, clubs and entertainment, declined by 2.4% (1,088 units) in the six-month period. Turn around LDC said it earmarked a “notable change” in the sector, which began after leisure units experienced consistent growth up to H2 2017. During those six months, the number of leisure units declined by 67. This shift was blamed on market saturation, operational costs and stalled expansion plans on the back of occupier uncertainty. The report also shows the decline was driven by both a slowdown in openings of new stores and an increase in closures of the chain brands in the sector. Food and beverage The decline in chain units was driven mostly by pubs, which fell by 6.5%. Other leisure categories to see net losses were bars, which reduced by 5.7%, and nightclubs, which fell by 1.4%. LDC linked the figures to a general decrease in alcohol consumption across the UK, with research published by the Office for National Statistics in May 2018 showing the proportion of people aged 16-44 who do not drink has increased since 2005. Café chains and fast food and accommodation operators remained resilient in the first six months of the year, with very little net change in numbers. There was growth in the market among concepts such as ice cream parlours, which grew by 51 stores, and independent coffee shops, which increased by 52 units. There was also good news for independent leisure occupiers – brands with less than five branches nationally – with their number of these stores remaining stable as they capitalised on the increasing popularity of food delivery platforms, such as Just East and Deliveroo. Wider implications Lucy Stainton, senior relationship manager at the LDC, said: “Previously, the sustained growth in the leisure sector has provided a balancing force for many high streets, shopping centres and retail parks, as sectors more challenged by online growth have reduced their physical presence. “This reversal of fortunes could well have wider implications for our shopping destinations, with potentially fewer leisure operators acquiring sites vacated by retailers such as clothes shops and high street banks.” Stainton added: “However, it’s not all doom and gloom with many of the key areas of growth so far this year in newer leisure concepts. We hope, therefore, that this decline in the leisure sector will stabilise in the coming months and years as newer brands and international concepts chart further growth”. Key findings across retail and leisure ■ The number of retail and leisure unit openings decreased to 19,803 in H1 2018, down 2.1% when compared to H1 2017 ■ The number of closures increased to 24,205, up 16.9% on H1 2017 ■ The overall vacancy rate across Great Britain remained stable at 11.2%, partially due to increases in modification of units such as merging, splitting and redevelopment for other uses ■ Growing retail categories include barbers (+349), beauty salons (+160), shoe repair units (+122) vaping stores (+94), supermarkets (+70), independent coffee shops (+52), ice cream parlours (+51) and health clubs (+50) ■ Retailers experiencing losses were estate agents (-211), women’s clothing (-171), newsagents (-160), general fashion stores (-144) and charity shops (-119) To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette