Decline in UK stores slows as retailers face make or break moment

Over 8,700 chain stores disappeared from Great Britain’s retail locations in the first six months of 2021, according to PwC research compiled by the Local Data Company.

In total, 3,488 shops opened, compared to 8,739 closures, creating a net decline of 5,251.

There was, however, some good news for both retailers and leisure operators, with the number of closures falling faster than than the number of openings.

As a result, the overall net closure rate is 750 lower than it was at the same point last year, despite some administrations of big name retailers in early 2021.

Most of the closures were on the country's high streets, while shopping centres and retail parks were affected to a lesser extent.

🛍️ I talked to @BBCEmmaSimpson about @PwC_UK & @LocalDataCo's latest store openings research, and what it means for our city centres. Watch on @BBCBreakfast this morning and read Emma's report here: https://t.co/xzlJ2dEd9k pic.twitter.com/MZCDOdRv29
— Kien Tan (@kientan74) September 5, 2021

Fashion retailers were worst hit, with 1,063 stores shutting in the first half of the year. Some 452 charity shops, 428 car and motorbike outlets, and 337 betting shops also closed permanently.

City centres saw a 4.3% drop in the number of occupied retail outlets as a rise in people working from home led many businesses to move to suburban or out of town locations.

Government support, in particular extended furlough and business rates relief until June 2021, have enabled operators to stay in business. Whilst a rent moratorium has prevented landlords from evicting operators due to non-payment of rent or arrears.

These measures have allowed stores to continue trading even where sites have been particularly hard hit by successive lockdowns.

Meanwhile, as spending intentions return to pre-pandemic levels, pent-up demand as lockdown measures eased has converted into better than expected retail sales in the first full months of trading.

“After an acceleration in store closures last year coupled with last minute Christmas tier restrictions and lockdowns extending into 2021, we might have expected a higher number of store closures this year,” says Lisa Hooker, Consumer Markets Lead at PwC.

“However, 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.”

Consumers still want a physical shopping experience and a number of chain stores and restaurants are opening, Hooker adds.

“There is opportunity for operators who can be nimble, taking advantage of the current situation to either open new stores or to move stores to better locations.”

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