Monday, June 1, 2020

Another record for store closures, but openings hint at a retail revival say PwC

Heightened restructuring activity has seen the half-year net reduction in stores on Britain’s high streets hit record levels according to research by the Local Data Company (LDC) and PwC.

The first half of 2019 saw almost twice as many store closures (16 per day) as openings (9 per day). In total, 1,634 stores opened and 2,868 stores closed over the period, leading to a net decline of 1,234 stores (compared with a net decline of 1,123 in the first half of 2018).

On a sector by sector basis, only 15 out of 96 sectors showed a net growth in store numbers, and all but two grew by only a single digit number of outlets: takeaways with a net increase of 26 outlets, and sport and health clubs with a net increase of 17. Meanwhile, the biggest net declines were seen amongst fashion retailers (-118), restaurants (-103), estate agents (-100) and pubs (-96).

In the East Midlands, charity shops saw the highest number of closures (13), but also saw a significant number of openings (6), reflecting wider trends. Vaping stores saw the highest number of openings (9) in the first half of 2019, with convenience stores showing the highest net change (+4).

Derby saw a net decline of 15 stores, the most in the region. Meanwhile, though Nottingham saw 31 disappear from its high street, it also saw 26 openings, the lowest net loss in the region.

The East Midlands, North East, South East and Yorkshire and the Humber were the only regions to see a reduction in their net closures between H1 2018 and H1 2019.

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.

“While retailers need to keep investing to make sure their stores and propositions are relevant to today’s consumers, it’s also critical that all stakeholders find ways to ease the burden on operators, keep investing in the high street, and encourage new and different types of operators to fill vacant space.

“The good news is that there are green shoots, as new entrants are entering even embattled sectors such as fashion. Our research tells us that consumers still want to spend their money in well located and invested stores and leisure venues on the high street.

“However, 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.”

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