Re­tail­ers urge min­is­ters to step in as high street store clo­sures soar

Num­ber of empty shops, pubs and restau­rants ris­ing at record rates

The Guardian - - Front Page - Sarah But­ler

Re­tail­ers and unions are call­ing for ur­gent gov­ern­ment ac­tion to help strug­gling high streets as new data shows the num­ber of shops, pubs and restau­rants ly­ing empty is ris­ing at the fastest pace in nearly a decade. About 16 stores a day closed in the first half of 2019, with only nine a day open­ing – caus­ing a net de­cline of 1,234 chain stores on Bri­tain’s top 500 high streets, ac­cord­ing to anal­y­sis by Price wa­ter house Coop­ers (PwC) and the high streets re­search group the Lo­cal Data Com­pany (LDC).

The de­cline, which does not in­clude in­de­pen­dent shops, was faster than the net 1,123 clo­sures in the same pe­riod last year – af­ter just 222 in 2017 – and is the high­est recorded since LDC be­gan mon­i­tor­ing high streets in 2010.

The shop clo­sure data re­flects a cri­sis on the high street that has cost tens of thou­sands of jobs. The re­tail in­dus­try em­ployed 57,000 less peo­ple in the three months to the end of Au­gust com­pared to the same pe­riod a year be­fore, ac­cord­ing to new data from the Of­fice for Na­tional Statis­tics re­leased yes­ter­day. It was the fifth con­sec­u­tive quar­ter of de­cline.

Ma­jor chains in­clud­ing Karen Millen, Jack Wills, Bath­store, Patis­serie Valerie and Deben­hams have gone into ad­min­is­tra­tion this year af­ter the col­lapse of House of Fraser, Evans Cy­cles, Maplin and Pound­world in 2018. Some of those chains are still in busi­ness af­ter be­ing taken over by new op­er­a­tors but have closed out­lets. Many other re­tail­ers, in­clud­ing Topshop owner Ar­ca­dia, Mon­soon, New Look, Car­petright and Home­base have been forced to seek le­gal agree­ments with land­lords to shut stores and slash rent bills to stave off in­sol­vency. “The gov­ern­ment must ad­dress the grow­ing cri­sis on our high streets,” said Paddy Lil­lis, gen­eral sec­re­tary of shop­work­ers union Us­daw, which has launched a Save our Shops pe­ti­tion.

Us­daw, and some of the UK’s big­gest re­tail­ers, in­clud­ing Tesco and Sains­burys, have de­manded a re­view of busi­ness rates and other taxes to en­sure there is a

‘The gov­ern­ment must ad­dress the grow­ing cri­sis on high streets’

Paddy Lil­lis Us­daw shop­work­ers’ union

level play­ing field with on­line ri­vals. Last month more than 50 ma­jor UK re­tail­ers, rang­ing from Marks & Spencer to Har­rods, Greggs and John Lewis wrote to the chan­cel­lor, Sa­jid Javid, to de­mand an ur­gent re­view of busi­ness rates to safe­guard the high street. They pointed out that re­tail­ers ac­counted for 5% of the British econ­omy but paid about 10% of all busi­ness taxes and about 25% of busi­ness rates.

Us­daw also wants bet­ter sup­port for com­mu­ni­ties and a min­i­mum wage of £10 an hour to pro­tect 4.5m re­tail jobs.

The gov­ern­ment re­cently in­creased its high street res­cue fund by £325m to £1bn, promis­ing to pump ex­tra money into 100 towns, in­clud­ing Black­pool, Scar­bor­ough and Clac­ton. It has also an­nounced £900m in busi­ness rates re­lief for small re­tail­ers and a task­force of ex­perts to as­sist lo­cal au­thor­i­ties in de­vel­op­ing “in­no­va­tive strate­gies to help high streets evolve”.

But re­tail­ers say a com­plete over­haul of prop­erty taxes is re­quired to help fend off com­pe­ti­tion from on­line-only op­er­a­tors such as Ama­zon and Asos. Dr Lil­iana Danila, econ­o­mist at the British Re­tail Con­sor­tium, said: “High streets are un­der­go­ing a fun­da­men­tal change in re­sponse to chang­ing shop­ping habits, new tech­nolo­gies and ris­ing costs of do­ing busi­ness, so it is vi­tal that gov­ern­ment sup­ports the in­dus­try to make the nec­es­sary in­vest­ment to adapt.

“The busi­ness rate sys­tem holds back in­vest­ment, re­duces pro­duc­tiv­ity and in­creases re­gional dis­par­i­ties … The gov­ern­ment must ad­dress the much-needed re­forms to this bro­ken tax sys­tem be­fore more jobs are lost and stores are closed.”

Re­tail chains have been hit by a mix of low con­sumer con­fi­dence, which has hit spend­ing, and ris­ing costs from busi­ness rates, an in­crease in the le­gal min­i­mum wage and ris­ing cost prices as a re­sult of the de­cline in the value of the pound since the EU ref­er­en­dum.

The rise of on­line shop­ping and a shift in con­sumer leisure spend­ing to­wards hol­i­days and din­ing and drink­ing at home have also hit high streets and shop­ping malls.

Fash­ion chains were hard­est hit in the first six months of this year, with a net de­cline of 118 stores as store chains such as New Look, LK Ben­nett, and the York­shire-based menswear spe­cial­ist Green­woods re­struc­tured or went bust, ac­cord­ing to the PwC/LDC study.

Restau­rants, es­tate agents, pubs and bars also reg­is­tered sub­stan­tial num­bers of clo­sures.

Wales was hard­est hit, with a net 2.3% fall in store num­bers – mean­ing one in ev­ery 44 stores in Wales closed in the first half of this year.

Ev­ery re­gion saw a de­cline in store num­bers. The east of Eng­land, west and east Mid­lands, York­shire and the Hum­ber all re­ported falls of more than 2%. In Greater Lon­don and the south­west of Eng­land it was just un­der 2%.

A sim­i­lar de­cline in store num­bers is ex­pected in the sec­ond half of 2019.

“As con­sumers con­tinue to change the way they shop and spend their leisure time, the re­al­ity is that we may need fewer high streets in the fu­ture,” said Lisa Hooker, con­sumer mar­kets leader at PwC.

There are some high street stores that are still show­ing growth, how­ever. Take­aways, health clubs, pet shops and dis­count stores are the fastest grow­ing out­lets.

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