The UK high street looks set to end the decade on a low note, as new research has revealed retailers are seeing their highest level of store closures in nine years. Averaging 16 closures per day, the UK saw a net loss of over 100 more stores than in the same period of 2018 alone, with worse expected to come for the sector as Brexit looms on the horizon.
Since the global financial crisis, the British high street has taken a consistent battering – with retailers Woolworths, media stores Zaavi and HMV, and electrical goods providers Comet and Maplin among the formerly high-profile casualties of the economic turbulence that began with 2007’s infamous credit crunch. Major brands have been vacating bricks-and-mortar presences for years since, a process accelerated by the boom in disruptive ecommerce platforms over the past decade.
2017 saw a brief reprieve for the sector, with green shoots seeming to suggest the retail sector could be on the brink of a recovery. PwC research found that in the first half of 2017, the high street enjoyed its lowest level of net closures since 2013. However, this did not last, and soon the anxiety of consumers over stagnant wages and a spiralling cost of living saw many potential customers become increasingly reluctant to spend on anything approaching ‘luxury’.
Just one year later, then, the picture was drastically different. A potent blend of spiralling debts, climbing business rates, and crippling costs related to a weakened pound triggered by Brexit compounded UK retail’s misery, and led to a net closure of 1,123 stores in the first half of 2018. Pointing to store closures in the second half of the year due to administrations and company voluntary arrangements, PwC concluded that the situation was likely to intensify, with the turmoil facing the retail sector unlikely to abate.
Now, PwC’s annual benchmark on UK retail has revealed those fears have been more than realised in 2019. According to the Big Four advisory and auditing firm, heightened restructuring activity has seen the half-year net reduction in stores on Britain’s high streets hit record levels, a net decline of 1,234 chain stores on Britain’s top 500 high streets – the highest number since analysis by PwC and the Local Data Company began in 2010, and the equivalent of 16 outlets every day.
On a sector by sector basis, the researchers found that only 15 out of 96 UK retail segments had enjoyed a net growth in store numbers since January 2019, and all but two grew by only a single digit number of outlets. The two segments to buck this trend were takeaways, which saw a net increase of 26 outlets, and sport and health clubs, which posted an increase of 17. Meanwhile, despite registering the largest number of openings of any sector, the biggest net decline was seen amongst fashion retail, at -118, closely followed by restaurants at -103), estate agents at -100, and pubs at -96.
Lisa Hooker, Consumer Markets Leader at PwC, said, “The record net decline in store numbers in the first half of 2019 shows that there’s been no let-up in the changing ways that people shop and the cost pressures affecting high street operators… As consumers continue to change the way they shop and spend their leisure time, the reality is that we may need fewer high streets in the future. This opens up opportunities to repurpose high street space for other uses, while the remaining space evolves to meet consumer demand for convenience, choice and experience.”
According to Retail Economics, 2.9 million are presently employed in the UK’s retail sector. With the rate of closures on the high street still outpacing openings, however, this will surely take a hit in the coming years, particularly as e-commerce continues to impact on the sales figures of physical stores. At the same time, with Brexit supposedly due to finally be realised at the end of October, the economic impact that is likely to have on the sector could see this trend ramping up in the coming year.