High street closures at lowest level in seven years, finds PwC research

High street closures at lowest level in seven years, finds PwC research

Retailers must continue to evolve if they are to make the most of both new digital opportunities and the country’s high streets.

That message came alongside new research showing that the number of high street shop closures has fallen to its lowest level in seven years.

The study of 500 town centres across the UK found that 2,564 shops shut in the first half of the year, equivalent to 14 a day.

At the same time, 2,342 shops opened, resulting in a net total of 222 store closures in the period against 503 in the same period last year.

This represents the smallest net decline since the first six months of 2013, when 209 more stores closed than opened, according to the PwC research compiled by the Local Data Company.

The analysis tracked 67,521 outlets in 500 town centres.

Leisure chains – food, beverage and entertainment – have continued to thrive, rising from 57 stores opening in the first half of last year to 116 in the same period in 2017.

Shoe shops, charity shops and women’s clothes shops were the three hardest hit sectors. Gift shops and card and poster shops have also been affected.

Tobacconists, beauticians and coffee shops were among those growing at the fastest rate during the first half of 2017. Ice cream parlours have also seen an increase.

Travel agencies are not mentioned in the study, but it reveals that the UK retail sector has higher online sales as a percentage of total retail sales than the US or any country in Europe.

Desktop PCs are still the most popular device for placing online shopping orders but mobile devices, especially smartphones, are catching up.

This online growth may see an already leaner, fitter high street evolving further, PwC suggests.

PwC consumer markets leaders Lisa Hooker said: “It’s encouraging to see the high street holding up – and even rallying in some cases.

“The twin cannons of increased online purchases and a tough economy have seen many retailers take a long, hard look at their store portfolios.

“There will always be a physical presence on the high street, but developments in technology are accelerating and impacting future staffing and operating models.

“Ways of shopping are continuously transforming and include subscription models, the connected home, and companies using data analytics to suggest your next purchase. Major questions are beginning to be asked about who will ultimately ‘own’ the consumer.

“The UK is one of the world leaders for consumer online purchases.

“Retailers must continue to evolve if they are to make the most of both new digital opportunities and the country’s high streets.”

Mike Jervis, insolvency partner and retail specialist at PwC, added: “The relatively low level of net closures in the first half of this year reflects a more stable environment, with consumer confidence proving more resilient than expected as the year unfolded.

“Historically the number of retail insolvencies has been a major factor in the volume of store closures. 2017 is on course to post the lowest level of administrations for more than a decade, with a favourable impact on overall store numbers.

“The environment is, of course, uncertain, with recent data showing a more challenging retail environment.

“I expect net store closures to be an ongoing feature of the market. Retailers will choose specific closure stores very carefully and will aim to capitalise on leases expiring in the ordinary course of their businesses.”

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