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Insight: retailers closing 15 stores a day

A new report has revealed that 2,656 shops closed on the UK’s high streets in the first six months of 2016 to mark a rate of 15 stores a day.


Insight: retailers closing 15 stores a day

A new report has revealed that 2,656 shops closed on the UK’s high streets in the first six months of 2016 to mark a rate of 15 stores a day.

The research compiled by PwC and the Local Data Company shows this was a slight increase on the 14 stores a day reported to have closed in the first six months of 2015. However, the number of new openings also fell, leading to a net 503 stores disappearing from high streets, retail parks and shopping centres in the first half of 2016. This represents the highest net decline since the first half of 2012, when 953 more stores closed than opened

A contributing factor is the advance of online shopping and LDC’s analysis shows there are over 22,200 click and collect services across 130 of the largest national retailers. Carphone Warehouse, ScrewFix, Toolstation and Lloydspharmacy were found to have had the biggest growth in click and collect services between 2015 and 2016.

Madeleine Thomson, retail and consumer leader at PwC, said: “Despite the uncertainty and fall in number of store openings, consumer sentiment has rebounded following the post-EU referendum dip. With employment levels still high and price inflation yet to hit the shops, the majority of the UK public believe they will be better off in 12 months.

“If we look ahead to Black Friday and Cyber Monday upcoming research shows that 27% of consumers intend to make purchases, spending on average £203 over the weekend. Of this spend, 17% of will be in store, rising to 24% for over 55s.

“To increase footfall to their stores, it is key for retailers to ensure their in store offering and price point is relevant for the younger demographic who are particularly high users of online channels and very price savvy.”

The analysis of 66,401 outlets operated by multiple retailers in 500 town centres across the UK found that overall volumes of activity including openings and closures plummeted from a record 7,749 in the first half of 2010 to 4,809 in the same period in 2016.

Tobacconists, health clubs and jewellers were among those growing at the fastest rate during the first half of 2016.

The data also reveals that across multiple retailers in 500 town centres, fashion shops, banks, mobile phone shops, and women’s clothing shops were amongst the hardest hit in the period.

Mike Jervis, insolvency partner and retail specialist at PwC, said: "The data covers the first half of 2016. Since then there has been more evidence of stress in certain parts of the retail sector as costs challenges begin to crystallise. These include foreign exchange rates, Living Wage pressures and business rates increases.

“These can be managed provided revenue is maintained - so consumer spending is key. The area where we expect most problems is in fashion retailing where recent data points to lower sales volumes.”

Comparison goods retailers were found to be under the most pressure with fashion stores and men’s and women’s clothes shops all in the six hardest hit sectors.

Greater London saw the biggest increase in net closures across all the regions. The capital’s net change increased to -164 stores in the first half of 2016, from -63 stores a year earlier.

Retail parks were the only location type to see growth in the number of occupiers, although their activity levels were significantly lower than high streets and shopping centres. Shopping centres had the highest percentage net loss at 1% in the first half of 2016.

Matthew Hopkinson, director of The Local Data Company, said: “The retreat of multiples from town centres across Great Britain continues, reflecting the wider changes happening in retail driven by the retrenchment of comparison goods retailers, especially in clothing and footwear.

“The role of the store continues to evolve. Provision of a seamless on and offline experience is key. ‘Click and collect’ is but one example of this.

“Chains are having to work harder than ever to guarantee store location, format and experience along with a strong web presence, social presence and logistical operation that delivers to consumers’ ever increasing demands of ‘now’. This is severely impacting profitability and hastens store closures.

“The spaces left by the traditional occupants of our high streets are being increasingly filled by health care operators, food and beverage operators and the ongoing rise of the discounters. Understanding the ‘who’ and ‘where’ when it comes to multiple retailers is the key to create the destination that leads to successful and healthy town centres.”


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