Insight: store openings reach lowest level in seven years
The data compiled by the Local Data Company for PwC reveals that the number of new high street stores opening in 2017 fell to 4,083, from 4,534 in 2016. This meant an average of 11 stores opened on UK high streets every day in 2017, down from 12 per day in 2016, and 15 in 2013.
In addition, an average of 16 high street stores closed every day in the year.
The data shows that the second half of 2017 saw substantially more closures and less openings than the first six months of the year as businesses battled against a tough trading environment including a slowdown in consumer spending and rising staff and business rates costs.
Lisa Hooker, consumer markets leader at PwC, said: "2017 was tough for the British retail industry, particularly the second half of the year. We saw volatility from month to month and across different sectors as wage growth failed to keep up with inflation, forcing many shoppers to think more carefully about their spending habits.
“On top of this, many retailers are increasingly feeling the impact of the acceleration of online shopping as consumers begin to feel more comfortable with the price transparency and reliability of delivery options offered by online players.”
Stores offering beauty products showed one the highest increases in net store numbers in 2017 alongside coffee shops, tea rooms, cafes and ice cream parlours. Booksellers and tobacconists also had a good year, with physical book shops and vaping remaining popular with consumers.
Businesses that offer a service, such as hairdressers, banks and travel agents, saw the biggest rise in closures in 2017, with 583 more closures than in 2016. These accounted for over a third of all closures on the UK's high streets.
Zelf Hussain, restructuring partner at PwC, said: "The end of 2017 was hard for UK retail and we've seen this continue into 2018, with the toughest first quarter of the year for the sector since the recession. We've seen some well-known names impacted as they face a perfect storm of issues - a fall in consumer confidence and reduced spending alongside a number of cost headwinds.
"Many retailers are using restructuring tools as a way to resize their store numbers. Survivors and thrivers will be those who address their cost issues and have a compelling 'bricks + clicks' offering to help them meet changing consumer trends and compete with online retailers who don't have the same legacy cost issues."
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