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Store closures running at twice the rate of last year

New figures have shown that shop closures in the UK have hit a record levels with over twice as many net store closures in the first… View Article

SHOPPING CENTRES, HIGH STREETS & RETAIL PARKS

Store closures running at twice the rate of last year

New figures have shown that shop closures in the UK have hit a record levels with over twice as many net store closures in the first half of 2020 in comparison to last year.

According to research by the Local Data Company and PwC, 11,120 chain operator outlets have closed so far this year compared to 5,119 shops opening,

The data shows that Covid-19 has accelerated the change in way people shop with more moving online, although there remains a consistent demand for retail, hospitality and services that can only be delivered physically.

Lisa Hooker, consumer markets leader at PwC, said: “We all knew that consumers were shifting to shopping online or changing their priorities in terms of the things they buy, but what COVID-19 has done is create a step change in these underlying trends to where they have now become the new normal.

“While it’s challenging for many, these results do prove a few positive things. Firstly, there’s been a resurgence of interest in local high streets. The practicalities of lockdown and the increase in working from home mean that independent shops tend to be located where consumers increasingly are.

“Plus a steady flow of openings, with the continued roll out of value retailers, the boom in takeaways and pizza delivery shops and demand for services that can still only be delivered locally such as tradesmen outlets, building products or locksmiths, shows that despite the stark numbers there remains a future for physical stores. We all still want and need to physically visit shops and leisure operators, it’s likely then that whatever happens retail will come out of this smaller but stronger”

Due to Covid-19, this year’s data covers the period from January to August. In later months, sites that had yet to re-open have not been counted as closed, and may be included in future surveys.

Lucy Stainton, head of retail and strategic partnerships at The Local Data Company, said: “The results from H1 2020 are a stark reminder of the challenges faced by retailers in the first 6 months of the year, which included a national lockdown. There are signs that this is just the tip of the iceberg, as 22% of the multiple market is still closed temporarily.

“With each week that passes since retail and hospitality businesses were given the green light to reopen, the likelihood of these occupiers ever trading again in those units reduces. This, alongside the impact of local lockdowns and other restrictions such as the 10pm curfew will continue to have a devastating impact on the sector with more closures likely to fall in Q1 2021 following the busier golden quarter.

“As with any economic turmoil, there are opportunities for retailers who are able to weather this storm, with the availability of prime property, increased activity and spend in local centres and changing consumer habits. Agile retailers who are able to innovate and adapt quickly, such as Pret launching its coffee subscription service or e-bike retailer Pure Electric who have opened 13 stores this year will be the most resilient as we head towards the end of a year which arguably has been the most challenging in recent history.”

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