Report predicts that 60,000 shops will close over next five years
A new report has predicted that that one in five high street stores will disappear by 2018, resulting in 60,000 shop closures and 316,000 job losses.
The Retail Futures 2018 report by Professor Joshua Bamfield from the Centre for Retail Research says that store vacancies across the UK have increased by 161% since the onset of the recession in 2008, reaching 14.1% today. The report predicts this figure could rise to 24% by 2018 if no preventative action is taken.
Welsh high streets will see the biggest changes, with 29% of stores set to disappear by 2018, followed by the North West with 28% and the East Midlands with 27%. The highest number of actual store closures will be in the North East where 25% of shops are expected to shut. The least affected areas will be London, where just 9% of stores will close, followed by the South East with 13%.
Retail Futures 2018 predicts that the issue will be more prominent in the non-food retail sector with 25% of stores shutting by 2018 as supermarkets take more of their sales and an increasing number of people shop online.
Never Miss a Retail Update!The hardest hit stores will be in the pharmacy and health and beauty sector with more than one in three set to disappear by 2018. Stores selling music, books, cards, stationery and gifts are also to become “far less prominent” within the next five years.
While the number of supermarkets will increase by 10% by 2018, the rise will have a knock-on effect on smaller grocery and other food stores which will decline by 12%.
The number of high street stores is expected to fall by almost 20% by 2018, but an even greater impact will be felt by neighbourhood stores. These are predicted to fall 26% as a result of the declining profitability of neighbourhood shopping in many areas.
The report reveals that online retail is set to account for more than a fifth of all retail sales by 2018 reaching 25.4% by 2020. This is expected to have major implications for the number and location of retail stores in future years.
While retailers used to need around 250 high street stores to create a national presence, today they require just 70 if they have a strong online offering. The report claims that some high-profile retailers may regard 30 stores as sufficient by 2018.
Bamfield said: “Customers now shop in multiple ways, checking a store’s website, visiting stores, reading reviews and making online price comparisons with smart phones whilst shopping.
“Retailers have to make clear and strategic responses to the changing pattern of how consumers shop which includes tactical decisions about store numbers and locations. They also need to fully integrate these physical stores with their websites, smart phone offering and social media community coherently.
“Going forward, I think retail stores will remain an important, although smaller, part of the shopping process as online retail continues to grow.”
