Britain loses 17,532 stores in 2020

The UK saw 17,532 chain store closures last year in the worst decline on record.

Research from PwC and Local Data Company (LDC) found that on average 48 chain stores closed every day, with only 21 opening.

Although 7,655 shops opened last year, compared to the high number of closures, there was a net decline of 9,877 – the highest ever.

The study found that five years ago in 2015, there was a decline of just over 1,000, with 50 per cent more openings and 25 per cent fewer closures than in 2020.

But the real impact of the pandemic could be even worse. Some stores that are ‘temporarily closed’ and counted as still open in the research, are likely to shut when restrictions are eased.

The significance of the Covid crisis on store closures depended on the location and type of retail space, with retail parks for example seeing the smallest number of net closures in any location at 453.

High streets saw 4,690 closures, while shopping centres recorded 1,791.

PwC said that footfall was already doing better in retail parks prior to the pandemic because of their investment in leisure, while some of them have benefitted by being anchored by essential retailers that have remained open, even during the tightest restrictions.

London, South East, and the North West saw the most closures, which is unsurprising as these areas have the most chain stores.

But London was hit much harder than other regions, with a record 5.8 per cent increase in net closures this year.

In recent years chain retailers have focused on more populous areas like London and the South East, but last year these areas accounted for a third of the decline of all shops, despite the South East remaining partly protected by the displacement of London shoppers as commuters work from home.

The research found that city centres are now faring worse than suburbs and commuter towns, and shopping centre shops are twice as likely to close as retail parks.

“For the first time, we’re seeing a widening gap between different types of locations: city centres and shopping centres are faltering, but certain retail parks with the right customer appeal are prospering,” said Lisa Hooker, consumer markets lead, PwC. “Location is more important than ever as we see a reversal of historical trends.

She added: “For years, multiple operators have opened more sites in cities and closed units in smaller towns. As consumer behaviours and location preferences change, partly as a result of COVID-19, retailers are moving to be where they need to be. Small towns will remain important but we can expect recovery in cities as workers and tourists return, albeit in smaller numbers adopting more flexible working models.”

Zelf Hussain, retail restructuring partner at PwC, said: “Government roadmaps across various parts of the UK are set to reactivate the High Street. But it's going to look very different post- Covid as businesses will have to weather the twin impacts of permanently changed shopping and working environments."

He added: “Companies must also run the gauntlet of rent payments and the eventual return of landlord enforcement powers and creditor winding up orders - all whilst trying to bankroll the costs of reopening, general operations, dealing with different regional rules and maximising revenues in what is set to be a fiercely competitive market.”

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