Big names are closing more outlets than they are opening
SOME of the biggest names on the Welsh High Street are closing more outlets than they are opening, according to new research from professional advisory firm PwC.
The research, carried about by the Local Data Company, found large retailers (defined as those having more than five outlets) closed 146 units while only opening 120, giving a net deficit of 26.
The figures for Wales fared better than many regions in the UK. Only the East of England, with a net change of plus two, and the North East, with a deficit of 14, recorded better figures.
The biggest loser was Greater London, with a net change of minus 232 and the South East with minus 182.
In Wales the results varied across the regions Cardiff and Swansea saw the biggest net loss with both recording minus 11, while Abergavenny, Newport and Pontypridd were among areas seeing a net increase in the numbers of outlets at the end of 2016 compared to the beginning.
There are a number of positive stories for Wales, with more openings than closures in the leisure subsector (8.7% openings compared to 8.1% closures) and the convenience store segment seeing the same number of openings as closures and therefore remaining steady.
Service-based retail businesses performed the least well, with 6.8% closures compared to 5% openings – reflecting a downwards trend nationally in high street recruitment providers, travel agents, estate agents, banks and insurance providers, which have increasingly moved online.
When it comes to individual business types, the biggest risers in the region include retailers of hearing aids and beauty products, as well as discount stores, affordable hotels and food outlets.
The biggest fallers include recruitment agencies, charity shops, fashion shops, banks and financial institutions, department stores and mobile phone shops.
Matthew Lister, retail specialist and director in PwC’s Wales & West region Deals team, said: “The research clearly highlights the changing face of town centres - leisure and experience destinations continue to replace traditional high street stalwarts.
“The insatiable appetite for fast food and coffee shops fills the void left by banks, mobile phone and clothing shops.
“The research also highlights that Wales has suffered fewer net closures than other regions of the UK, including London and the South East. The recent business rate reassessments may support a continuation of this trend in 2017.”
Across Britain tobacconists, health clubs and jewellers are among the retail chains growing at the fastest rate on high streets.
Take away food shops, ice cream parlours and American and Italian restaurants also thrived last year, as the high street continues to rebalance from shopping to leisure.
The research also reveals that the number of cheque cashing outlets, clothing and fashion shops, banks, and insurance agencies all declined in 2016.
LDC’s analysis of out of town locations (retail parks) shows an opposite picture where chain retailers have continued to expand and in 2016 saw an increase of occupied stores by 307 (+3%). This number illustrates the structural change that has been taking place from many town centres to out of town retail parks.
Matthew Hopkinson, Director of The Local Data Company, said: “Town and city centres have seen the loss of chain retailers for the last seven years so it is no surprise to see this trend continue. What is of concern, however, is the significant slowdown in openings of chains on our high streets with many favouring out of town locations where large store formats, free parking and lower costs play to the all important consideration of convenience.
“Conversely, however, 2016 did see the opening of big store out of town formats coming onto the high street such as Topps Tiles, B&Q and DFS. Costs of operating a shop be it people, taxes and rents have started to rise putting the importance of the right location right at the top of every retailer CEO’s mind.
“Leisure (food and beverage) outlets is the only business category that has seen growth in 2016 but this has also seen the significant slowdown in openings which is perhaps a reflection of a bubble starting to burst after years of significant growth.”
Madeleine Thomson, retail and consumer leader at PwC, said: “With prices on the up and less disposable income available to the average GB consumer as a result, retailers will need to be versatile and savvy to increase footfall to their stores. Our Total Retail research** shows that almost half (48%) of UK shoppers buy online because they find it more convenient than visiting a shop.
“However, despite the fall in new store opening, consumers continue to place value on the in-store experience, with the number one in-store attribute being shop staff with a deep knowledge of their product range.
“As we look ahead, the ‘Total Retail’ experience looks to be defined as simple and streamlined; one that maintains a human touch, blending the best of technological advances with helpful and expert staff both in-store and online.”