Retail is the heartbeat of many Welsh towns and cities providing jobs, driving footfall, supporting local supply chains, and acting as a catalyst for wider economic activity.
Whilst it remains the third-largest sector by employment in Wales, one in six Welsh shops now stands empty although paradoxically perhaps, research has shown that demand for retail space is rising with small businesses wanting to return to the high street and independent retailers growing in number.
So, what is going wrong and why is there a mismatch between supply and demand?
Despite the availability of space, securing a suitable retail unit can still take more than six months, and many of the shops that appear empty are effectively inaccessible, with no identifiabl
e letting agent linked to vacant properties in 40% of locations across the º£½ÇÊÓƵ. In many cases, the owners are based outside Wales (often outside the º£½ÇÊÓƵ altogether), resulting in absentee landlords with no local connection, no accountability, and no motivation to support high street revival.
The current business rates regime also compounds the problem as for too many retailers, the cost of rates exceeds the cost of rent which is enough to make a unit financially unviable. Pop-up shops, which are often exempt from paying rates, have become the more attractive option but have also created a perverse incentive namely to stay temporary or stay out altogether, with long-term tenants effectively punished for committing to a lease.
Even when a business manages to locate an owner, navigate the bureaucracy, and absorb the tax burden, the unit itself is often unfit for modern use, with many vacant retail spaces in Welsh towns outdated, poorly maintained, or poorly configured.
Indeed, today’s retailers need more than just four walls and a till and instead require adaptable layouts, storage space, energy efficiency, broadband infrastructure, and the flexibility to use a space for more than just selling products. In too many cases, the physical infrastructure of Welsh high streets simply hasn’t kept pace with the needs of contemporary retail.
Nowhere is the crisis more visible than in Newport, which has the highest retail vacancy rate in the º£½ÇÊÓƵ. As a result, it has become a case study in how market dysfunction, policy inertia, and landlord detachment can stall economic recovery and is a reminder that without serious reform, other Welsh towns will follow the same trajectory.
Part of the challenge facing Wales’ third city is empty units, lower footfall, reduce investor confidence, all of which have stalled any momentum for regeneration. More worryingly, once vacancy takes hold, it becomes self-reinforcing and as shops close, people stop coming, more shops close, and the message it sends is that the high street is closed.
But it doesn’t have to be this way. In Bangor, the local chamber of trade, led by local entrepreneur Nick Pritchard, is showing what can be done when there is local vision. Bangor’s high street, like many others in Wales, has suffered from underinvestment, with over 45 shops currently vacant on the longest high street in Wales.
However, the chamber is now seeking to bring together landlords, local businesses, and community stakeholders to change that, with plans to develop small, manageable units as ideal spaces for independents. In addition, Nick has put his own money on the line by purchasing several empty shops to make them available to local traders.
It’s early days and a demonstration of how high streets can be reimagined but such interventions by the private sector also need local authorities and the Welsh Government to step up and support such efforts. That includes reforming the way business rates work, making buildings more flexible, and giving local councils the power to take control of long-term vacant properties.
And if landlords won’t engage, public bodies must be able to intervene through compulsory purchase orders, tax incentives, or partnerships with social enterprises and local business groups to change the narrative.
It’s worth noting and the Welsh Government is considering reducing business rates for smaller retail shops and is allocating £40m through its Transforming Towns programme to support high street regeneration. It has also published a Retail Action Plan which aims to create a resilient and sustainable retail sector that offers fair, secure, and rewarding work.
Yet it could and should be doing more, and a recent survey found that whilst three quarters of recently relocated businesses were aware of Business Wales, they did not access support. In addition, the Welsh Government’s funding body - the Development Bank of Wales - had higher rates of unsuccessful applications from retailers indicating a potential mismatch in service offerings.
In fact, given the major challenges facing high streets in Wales, you have to ask why the development bank has yet to launch a dedicated regeneration fund to help small businesses take on and refurbish long-term retail units, particularly in areas with high vacancy rates? It should also look to support community-led organisations, such as business improvement districts or chambers of trade, to acquire or lease empty premises for sub-letting to local firms.
It’s not rocket science as we all know the causes of high street vacancy namely absentee landlords, broken tax policies, outdated stock, and policy gaps. However, the solutions are also clear such as visibility of ownership, affordable terms, modernised premises, financial support, and local coordination. What is missing is the political will to connect the dots and implement reform at scale and until that happens, the high vacancy rate will remain more than a statistic and will instead be yet another symbol of missed opportunities to make things better.
And yet if places like Bangor can create a plan to turn things around with limited resources and strong local leadership, imagine what could happen if Welsh towns and cities had real support to remove the barriers that slow down any progress to let the high street rebuild from the ground up.
