Decline in number of stores slows
New figures have pointed to a slowing in the decline in the number of stores across the UK as government measures and pent-up post-lockdown demand provide some protection.
Figures from the Local Data Company have shown that over 8,700 chain stores disappeared from UK retail locations in the first six months of 2021. While some 3,488 shops opened, 8,739 closed to give a net decline of 5,251, according to PwC research compiled for the Local Data Company.
However, the number of closures fell faster than the number of openings. This meant that the overall net closure rate was 750 lower than it was at the same point last year, despite some high profile administrations of high street fashion retailers and department stores in early 2021.
Lucy Stainton, commercial director at The Local Data Company, said: “There are promising signs that the speed of the decline we were tracking across the worst of the pandemic is slowing. Our latest research on behalf of PwC points to a gentler net decline and pockets of resilience in key sectors such as fast food take away and convenience stores. Beyond this, we have witnessed the independent retail market returning to modest growth as consumers were motivated to support local businesses.”
Lisa Hooker, consumer markets lead at PwC, added: “Government support has proved to be the lifeline for many to weather the storm and survive the pandemic. The fate of many operators has also been helped by resilience in consumer spending, including investment in the home through lockdown and using enforced lockdowns savings for ‘revenge spending’ when possible.”
Looking at the locations of closures, city centres fared worse than commuter towns and villages as more people continued to work from home or moved towards a hybrid working model post-pandemic. This meant that London’s City and West End locations declined faster than suburban areas which were supported by people working from home visiting their local high streets.
While the research found that the South East and East Anglia were relatively protected in the period, longer lockdowns in Scotland and Wales last year meant that these regions fared worse in early 2021 than in 2020, with some store closures delayed until the current year.
Meanwhile, retail parks saw a smaller number of net closures at 634 compared to 3,643 for high streets and 1,464 for shopping centres. The LDC said many retail parks benefited from being anchored by grocery, DIY and home furnishings retailers, categories that have outperformed others since the start of the pandemic, and the fact that many are easily accessible by car.
Looking ahead, Hooker said: “Operators are far from out of the woods and the next six months will be a make or break for many chains, particularly with the reinstatement of full business rates for all but the smallest operators, the winding-down of furlough support and agreement yet to be reached between many operators and landlords on rent arrears. There is also continued uncertainty for hospitality businesses who will be apprehensive of further restrictions on operating and the possible requirement for vaccine passports later in the year.”
