Reports have been released this week suggesting that the UK retail renaissance is aiding companies across the nation to greater profitability. What does this this say about the economic phenomenon and where could it go from here?
The UK retail renaissance is a phenomenon that experts have said has aided in the countries sustained economic recovery. It has seen shop vacancy rates fall to their lowest numbers since 2010, the height of the great recession. Now shop vacancy rates stand at 13.9% across the board, a record low from the 14.6% it stood at in February 2012.
Therefore the UK retail renaissance is a movement that is seeing companies from local businesses to large retail chains expand, causing shop vacancy rates to fall and profit margins to increase. Basically the receding recession is causing Britons to buy more and companies everywhere are benefitting from this increased spending power.
Reports suggest this week that the latest company to benefit from the economic movement is UK retail chain Hammerson. The company, buoyed by both greater spending and the general economic recovery, reported pre-tax profit of £341.1 million over the last fiscal year. This total profit was double the pre-tax figure the retail company reported for 2012.
Furthermore the company has reported that their like-for-like net rental income saw an increase of 2.1%; it stood at £282.8m in 2013. This allowed the company to increase its final dividend to stand at 10.8% a share, for a total annual dividend of 19.1p.
Also the retail chain’s Les Terrases du Port in Marseilles now stands at 93 per cent let, meaning that it is on schedule for its 3rd May opening date, construction has also commenced on the at Le Jeau de Paume in Beauvais suggesting that its UK success could lead to a greater scope for a widening of its economic activity in its operations across the channel in France.
David Atkins, Chief Executive of Hammerson commented on UK figures and French markets. He said that whilst the company has “reported a good set of results in a year when we saw the beginning of economic and consumer recovery in the UK” in France “the economic picture is less clear cut.”
These latest figures from Hammerson illustrate the power of the UK retail renaissance. A heightened rate of economic recovery coupled with interest rates standing fixed at 0.5% for the foreseeable future is facilitating larger profit margins across the board. Considering that these conditions are set to continue to the next fiscal year, the economic movement looks set to see businesses across the country flourish.