Britain’s retail locations has seen a net decline of 5,251 operators in the first six months of 2021, with 8,739 chain stores closed against 3,488 store openings.
The PwC research compiled by the Local Data Company has, however, showed that the number of store closures is falling faster than the number of openings, resulting in a overall net closure rate that is lower by 750, when compared to the same period last year.
Government support, in particular extended furlough and business rates relief until June 2021, have enabled operators to stay in business, the report noted.
“After an acceleration in store closures last year coupled with last minute Christmas tier restrictions and lockdowns extending into 2021, we might have expected a higher number of store closures this year. Government support has proved to be the lifeline for many to weather the storm and survive the pandemic,” Lisa Hooker, consumer markets lead At PWC, said.
“The fate of many operators has also been helped by resilience in consumer spending, including investment in the home through lockdown and using enforced lockdowns savings for ‘revenge spending’ when possible.”
City centres now fare worse than commuter towns and villages (-4.3% vs -3.0% and -2.3%) in store closures as footfall in cities is yet to recover to pre-pandemic levels.
Retail parks have seen a smaller number of net closures (634), compared to high streets (3,643) and shopping centres (1,464). The report attributed the presence of grocery, DIY and home furnishings retailers as anchor stores, that have outperformed others since the start of the pandemic, for the resilience of the retail parks.
Total vacancy across GB had reached an all-time high of 14.5 per cent at the end of H1 2021.
Hooker noted that the next six months will be a “make or break” for many chains with the reinstatement of full business rates, winding-down of furlough support and lingering issues around rent arrears.
“But the good news is that there are some green shoots of optimism. Consumers still want a physical shopping experience and a number of chain stores and restaurants are opening. There is opportunity for operators who can be nimble, taking advantage of the current situation to either open new stores or to move stores to better locations,” she added.
Lucy Stainton, commercial director at the Local Data Company, cautioned that the “compound impact of multiple lockdowns” can’t be ignored.
“Whilst a slowdown in store closures is certainly welcome and a positive sign, the volume of empty units across GB is at a record high with no sign that the demand will ever be there to meet the supply,” she said.
“In fact, the data for H1 2021 indicates that openings were at the lowest they have been for six years. I fervently believe that there is still appetite for retail and leisure provision away from online, especially for occupiers that innovate in order to retain consumer interest long-term. However, the key to protecting our retail destinations will be for landlords, councils and place makers to proactively consider surplus space and how they can redevelop property for other uses outside of retail.”
