News
Joel Muckett 13 Nov 2017 02:33pm

Fewer high street stores closing, says PwC

High street stores are closing at their lowest rate in seven years, despite advances in online retail

In an analysis of 67,000 outlets in the UK, PwC and the Local Data Company (LDC) found that 2,342 opened on high streets, retail parks and shopping centres, while 2,564 closed – the equivalent of 14 closures per day.

The overall volumes of activity – openings and closures – fell from a record 7,749 in the first half of 2010 to 4,906 in the first half of this year.

The leisure sector (food, beverage and entertainment) thrived during the first half of the year, with 116 stores opening compared to 59 during the same time last year.

Tobacconists, which saw a net change of +34, beauticians (+29) and coffee shops (+24) were among the fastest growing retailers during the first half of 2017, with ice cream parlours (+16) such as Ben & Jerry’s performing particularly well.

PwC consumer markets leader Lisa Hooker said it was “encouraging” to see the high street “holding up” and “rallying” in particular cases.

“The twin cannons of increased online purchases and a touch economy have seen many retailers take a long, hard look at their store portfolios,” she said.

“There will always be a physical presence on the high street, but developments in technology are accelerating and impacting future staffing and operating models.”

Hooker added that ways of shopping were continuously transforming, and that questions were being asked over who ultimately “owned” the consumer.

“The UK is one of the world leaders for consumer online purchases. Retailers must continue to evolve if they are to make the most of both new digital opportunities and the country’s high streets,” she said.

Charity shops (-55), shoe shops (-38) and women’s clothing shops (-37) were the hardest hit sectors in the first half of 2017, with gift shops (-32) and card and poster shops (-32) also being negatively affected.

Additionally, the emergence of online property websites such as Rightmove has caused a decline in high street estate agents, with a net decline of 36 (78 opening versus 114 closures).

Sectors that had previously seen significant net declines were moving towards stability as cheque cashing (-13), banks (-32) and general fashion shops (-25) posted their lowest net closures in three years.

PwC insolvency partner and retail specialist Mike Jervis said the low level of closures reflected a “more stable environment”, with consumer confidence remaining more resilient than expected.

“2017 is on course to post the lowest level of administrations for more than a decade, with favourable impact on overall store numbers,” he said.

With the environment remaining uncertain, Jervis predicted that net store closures would continue to be a feature of the market.

“Retailers will choose specific closure stores very carefully and will aim to capitalise on leases expiring in the ordinary course of their business.”

The East Midlands (+8) and Yorkshire in the Humber (+12) were the only regions to see increases in store openings, while Scotland (-42) saw the largest number of net closures out of all regions.

The decrease in the of chain retailers closing was a sign of “increasing stability” for towns in Britain that had lost multiple retailers in the past decade, according to LDC director Matthew Hopkinson.
Topics