Britain’s high streets are in “turmoil” as thousands of shops close up and down the country, experts have said.
High street shops including well-known brands closed a rate of around 14 a day in the first half of the year, while openings were down a third, a new report released yesterday suggests.
Retailers are battling the worst trading conditions for five years, the report said, with huge growth in internet shopping, business rates blamed for the challenging climate.
But there is also a trend towards “in-home leisure” as people prefer to spend their free time at home instead of going out, so restaurants and entertainment businesses have also been affected.
Italian restaurants including Jamie Oliver’s chain are said to have been particularly badly, while retailers such as Toys R Us and Maplin have disappeared completely as more people shop online.
Some 24,205 retailers closed across 3,000 towns, cities, retail parks and shopping centres monitored by the Local Data Company in the first half of 2018.
The number of new openings declined by 2.1 per cent to 19,803 over the six months – leaving 4,402 more gaps on the high street.
That total is more than double the number ever previously recorded since the monitor began five years ago.
PricewaterhouseCoopers conducted their own research of 500 town centres and saw 2,692 stores vanish – a rate of roughly 14 a day.
Ministers have been urged to take concerted action to help Britain’s beleaguered town centres, with experts warning the turmoil is “unlikely to abate”.
The Government said the recent Budget has “high streets at its heart”.
Greater London and the South East were the regions worst hit by closures of chains, followed by the Midlands, the North East and East of England.
The most prominent businesses to go under were pubs, clothing shops and estate agents – meanwhile data form the retail aggregator LovetheSales.com shows online retailers have seen their prices reduce by 27 per cent year on year.
Lisa Hooker, consumer markets leader at PwC, said the continued rate of store closures “reflects the new reality that many of us prefer to shop online and increasingly eat, drink and entertain at home”.
“The high street is adapting to an overcapacity in retail and leisure space resulting from these channel shifts,” she said.
“Openings simply aren’t replacing the closures at a fast enough rate. Specifically, the openings across ‘experiential’ chains, such as ice cream parlours, beauty salons and vape shops, haven’t been enough to offset closures in the more traditional categories.
“Looking ahead, the turmoil facing the sector is unlikely to abate. Store closures already announced in the second half of the year due to administrations and CVAs already will further intensify the situation.”
Tom Ironside, director of business and regulation at the British Retail Consortium, told The Guardian: “The pressure on retailers, which is contributing to store closures, will continue unless the government takes decisive action.”
He also called for the Government to address “spiralling business rates for the larger businesses that employ the majority of the UK’s 3.1 million retail workers”.
Disappearing from our high streets
Britain has seen a number of huge household names buckle for various reasons
Toys’R’Us: Chain of 105 toy outlets closed the last of its remaining stores earlier this year, leading to a loss of 2,000 jobs.
Staples: Stationary and office supplies folded in 2016-17 after a failed merger.
Banana Republic: Gap-owned fashion brand moved its retail business completely online in 2016.
BHS: Philip Green’s low-cost home-store was dissolved after 88 years as a household name.
Austin Reed: Menswear brand cut 1,000 workers when it shut up shop in 2016.
Phones4U: Mobile retailer was forced to close when it lost every one of its partnerships with network operators in 2014.
Blockbuster: Video rental service caved under the competition from online streaming in 2013.
JJB Sports: Absorbed into Sports Direct before 120 stores were closed, cutting 2,000 jobs.
Comet: Electronic retail chain closed in 2012 after failing to refinance.
High streets minister Jake Berry said: “The Government recognises the challenges facing high streets driven by changing consumer behaviour.
“That is why the Budget has high streets at its heart. We have created a £675 million fund to help high streets adapt, slashed business rates by a third for the majority of smaller businesses, and are creating a task force guided by Sir John Timpson, one of the UK’s most experienced retailers, to ensure that high streets are adapting for rapid change and are fit for the future.
“These measures totalling over £1.5 billion show the Government’s determination to make thriving high streets a permanent part of every community in England.”
Toys R Us, Maplin, Poundworld and Coast have been among the major fatalities on the high street so far in 2018, while House of Fraser was rescued from administration by Sports Direct founder Mike Ashley.
Debenhams, Marks & Spencer, Mothercare, Homebase and Carpetright have undertaken closure programmes with varying scales.
Company Voluntary Arrangements (CVAs) have been used with increased frequency as large and established chains struggle to adapt to the changing consumer landscape while being buffeted by headwinds including the increased costs from wages and rates.
Jamie’s Italian and Prezzo have announced CVAs, while Gourmet Burger Kitchen and Byron are also utilising the arrangements.
Martin Lane, Managing Editor of Money.co.uk said: “This isn’t surprising but still terribly sad news for the great British high street, especially in the run up to the festive period. Store closures and redundancies have been all too prominent in the last year and it’s unlikely to stop any time soon.
“With sky high rents for retailers, consumers tightening their purse strings and the convenience of shopping online at arms reach, it’s produced the perfect storm for our beloved high streets.
“The government pledge to help will hopefully start to ease the pressure on retailers, however I very much doubt that it will reverse the damage that has already been done. Retailers are stuck in uncertain times and until wider market conditions improve we are likely to continue seeing the same story.”
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