Chain reaction set to continue on High Street
MORE STORES FORECAST TO CLOSE AS 1,300 SHUT LAST YEAR
ALMOST 1,300 chain stores disappeared from East Midlands high streets last year – with even more closures forecast.
New figures show how the loss of high street names such as Debenhams, Top Shop and Burton – whose online operations have been bought – has left hundreds of empty units in our towns and cities, along with smaller independents and restaurants that won’t be returning.
Figures from business advisers PwC suggest 17,500 chain store branches closed across the UK last year – around 48 every day. It said for every two chain store branches lost, one new store has opened, while retail parks had been more resilient to closures than city high streets and big shopping centres.
The PwC research compiled by the Local Data Company shows how the findings compare to 2015, when East Midlands shop openings were at 750 and closures hit 887.
PwC said the real impact of the pandemic was yet to be felt as some stores “temporarily closed” during lockdowns, were unlikely to return when things such as the furlough scheme end.
The company said retail parks had seen the smallest number of net closures of any location, with 77 in the East Midlands, compared to shopping centres (159), with high streets in general faring worst of all (490).
A spokesman said: “Footfall was already holding up better in retail parks before the pandemic due to their investment in leisure and some retail parks have benefitted by being anchored by essential retailers that have remained open, even during the tightest restrictions.
“But it’s also because they’re considered safer in the current environment – free parking means it’s possible to drive to the location, outdoor areas mean reduced indoor mixing and larger units allow for better social distancing measures.
“Shopping centres by contrast, are often poorly located for consumers who want to shop local and travel less to city centres, and are more likely to host fashion retailers and chain restaurants, which are the number one and the most hard hit categories for net closure in 2020.
“Meanwhile, the drop off in highstreet footfall has affected those multiple retailers located on high streets, particularly those in large city centres.
“However, this decline in multiples has been somewhat offset by growth in interest of local and independent operators. Small towns, which have long been in decline at the expense of more populous areas and cities, are now also enjoying a mini-renaissance.
“Consumers now want to shop in these locations, and larger retailers want to be there.”
PwC said big cities had seen a near 8% decline in multiples.
Sarah Philips, Midlands consumer markets lead at PwC, said: “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.
“Location is more important than ever as we see a reversal of historical trends. For years, multiple operators have opened more sites in East Midlands 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.
“The effect of Covid-19 is yet to be seen on most categories as much of the impact we’ve seen this year is a reflection of things that happened before the pandemic.
“This was not just the move online but areas such as legislative changes, for example for betting shops, consolidation due to previous overexpansion, or chainwide closures for restaurants and mobile phone stores that found themselves in trouble pre-Covid-19.
“The full extent will be revealed in the coming months as many of the CVAs and administrations in the early part of 2021 still haven’t been captured, including department stores, fashion retailers and hospitality operators that will leave big holes in city centre locations.
“Retail and leisure operators must take action to ensure they are in the right places, so they’re not left surrounded by empty units and shopfronts.”