6-yr high for shop closures
THE net shop closure rate in Wales has hit a six-year high but retailers are weathering the difficult trading conditions better than Scotland and most English regions.
Analysis from professional advisory firm PwC and The Local Data Company (LDC) shows there were 384 openings and 786 closures in Wales in 2021 – a net lose of 402.
However, the 4.4% closure rate is below the average rate for the UK at 4.7% and significantly lower than regions like London and the West Midlands which saw the biggest changes to consumer behaviour as a result of the pandemic.
Overall, the report concluded that Welsh retailers have fared better against the challenging trading conditions compared to Scotland and all but three English regions: the East Midlands, the North East and Yorkshire and the Humber.
As part of the analysis, the Local Data Company tracked 203,718 outlets operated by multiples (retailers that have five or more outlets) across the UK between 1 January and 31 December 2021.
The Local Data Company visited high streets, shopping centres and retail parks across the UK to obtain data on its occupancy status whether occupied, vacant or demolished.
The analysis found that location has been an important factor with retail parks having consistently outperformed shopping centres and high streets for the past six years.
Since restrictions lifted footfall recovery has been much faster in out of town retail parks which benefit from easy access and good parking – bolstered by car travel which recovered quicker than public transport.
In 2021, retail parks throughout the UK saw the smallest net change (openings minus closures) of any location with a net closure rate of -4% (593) compared to high streets at -5% (4,287) and shopping centres at -7% (1,690).
Shopping centres have been hit hardest with closures of fashion retailers, department stores and restaurant chains.
Jason Clarke, assurance and private business lead for PwC in Wales, said: “There’s no denying that trading conditions for retailers in Wales continue to be difficult; we saw evidence of the ongoing march towards e-commerce in the 2021 failure of a number of high street giants, many of whose brands were bought from administration and stripped of their physical stores.
“As more consumers work flexibly, city centre retailers face a struggle to drive footfall to brick-and-mortar establishments. But 2022 should be a better year: if retailers and local authorities can learn from retail parks, which fared comparatively well in 2021, we may see the gap between closures and openings drop.”
Across the UK, the report found over 10,000 chain store branches disappeared from retail locations in 2021. In total, 7,160 shops opened compared to 17,219 closures meaning a net decline of 10,059.
However, closures are expected to slow through 2022 as the last two years have seen a shake out of some large fashion and department store chains.
Consumer markets lead at PwC Lisa Hooker said the closures are an acceleration of what was happening before the pandemic.
Ms Hooker said: “Changes in consumer behaviour, changing patterns of working and the shift to online is impacting on both retail and service chain operators. Location matters most to consumers and whilst city centres and shopping centres falter, retail parks and standalone operators have broad appeal. Multiple operators are taking note and are relocating stores to where their customers need them to be.
“There is a pressing need to radically reshape and even repurpose towns and city centres. High streets must understand why retail parks are so attractive to consumers or look for ways to better serve local needs, encouraging independent retailers and entrepreneurs to take this opportunity to grow into the gaps that are emerging.”