New figures: rate of store closures slowing
New figures have revealed that over 10,000 chain store branches disappeared from UK retail locations in 2021.
According to PwC research compiled by the Local Data Company, there were 7,160 shop openings compared to 17,219 closures, which meant there was a a net decline of 10,059.
Although the net change has worsened since 2020, the figures show that the number of closures per day has remained stable at 47 in 2021, compared to 48 in 2020.
The LDC said the number of openings has declined by 26% since 2019, the last year pre-pandemic. While there were over 7,000 new openings in 2021, LDC said many of these were due to natural churn and the re-siting of existing stores. Apart from takeaways and government job centres, no other category saw more than 20 net openings in 2021.
However, the company now expects the number of closures to slow down throughout 2022 due to the last two years seeing a shake out of some large fashion and department store chains which were on the brink of collapse. With these stores now closed, it is now predicting that future store closures should begin to level off.
Lucy Stainton, LDC commercial director, said: “These latest figures for 2021 show the gap between openings and closures has widened, though hopefully this marks the end of the worst of the structural decline in chain retail exacerbated by the pandemic.
“2021 was an extremely challenging period for occupiers, with the first three months lost to a strict lockdown, limitations on international travel impacting tourism, increased migration to online retailing, mobility restricted across all sectors and continuing home working impacting city centres.”
Looking at the various retail locations, retail parks saw net closures of -4% compared to high streets at -5% and shopping centres at -7%. In addition, city centres and London postcodes have seen an acceleration in net closures since the pandemic.
Lisa Hooker, consumer markets lead at PwC, said: “The last two years have been tumultuous for retailers but the closures we’ve seen are an acceleration of what was happening before the pandemic. Changes in consumer behaviour, changing patterns of working and the shift to online is impacting on both retail and service chain operators.
“Location matters most to consumers and whilst city centres and shopping centres falter, retail parks and standalone operators have broad appeal. Multiple operators are taking note of this changing consumer behaviour and are relocating stores to where their customers need them to be.”
Stainton added: “Ultimately, these latest statistics on the performance of the chain sector should not be viewed in isolation and don’t point to ‘the death of the high street’, but rather represent a last shakeout of some of the heritage brands, paving the way for new operators and so the constant evolution of physical retail continues.”
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