Report reveals businesses are still suffering under steep rents and Covid's continuing impact

The High Street is suffering a brutal combination of Covid's lingering effects and high retail rents a new report from Real Business Rescue reveals.

Real Business Rescue has analysed current commercial retail listings to find the cheapest and most expensive areas in the UK for those considering starting a business.

Currently, there is £3.7 billion worth of unused retail space in the country - a staggering 150 million square feet. Shaun Barton, the National Online Business Operations Director at Real Business Rescue, attributed this to businesses battling "one of the toughest periods they've ever faced".

Barton cited high rental prices, the fallout from the pandemic and rising inflation, coupled with aggressive debt collection from commercial landlords and the 'cost of doing business crisis', as the reasons why "a significant number of retailers across the country are facing a battle to remain financially solvent and viable".

It's not great for London

Unsurprisingly, the report found that the highest retail rents in the country are those in London where the average price per square foot per year is £49.64 - double the UK average of £24.48. The capital's most expensive borough was Kensington and Chelsea where business owners can expect to pay a hefty £86.18 per square foot per year. The second and third priciest boroughs were the City of London and Camden at £63.96 and £56.21 respectively.

London also topped the league tables for the number of companies in significant financial distress and for failing to recover to pre-pandemic footfall levels.

The footfall recovery index utilised the Centre for Cities high street recovery tracker and data sourced from Locomiser to assess differentiation in rates of foot traffic recovery across the UK. The footfall recovery index scores range from 59 to165 and measure the extent to which footfall has returned to pre-pandemic levels.

The report suggests that the substantial number of office workers choosing to permanently work from home contributed to London's low score of 59. An unfortunate coalition of dwindling foot traffic and harsh rents has left many of the capital's businesses facing a bleak state of affairs, as the report states that over 125,000 were in significant financial distress in Q4, 2022.

Other cities still floundering under Covid's unremitting grip were Birmingham, Slough, Coventry and Luton as they too have struggled to return to pre-Covid footfall levels.

But it wasn't all bad

Cheeringly however, business owners in other parts of the country have far less reason to be despondent. The five cities with the highest rate of return to pre-pandemic footfall levels - Plymouth, Blackpool, Southend-on-Sea, Dundee and Burnley - all have commercial rent prices significantly lower than the UK average.

The report's findings should be especially encouraging to those considering opening businesses in Blackpool as the city received a footfall recovery score of 160, the second highest in the country, and has the UK's lowest retail rent prices, at an average of only £12.45 per square foot per year. When compared to the stark prospects for small business owners in the capital, the seaside town, which received a record 12 million visitors in 2021, is looking particularly enticing.