Wednesday, 17 Jul 2024

High Street crisis: Shops closing at a rate of '14 per day'

It found store openings continued to lag the pace of closures in a period that saw several household names disappear and others seek emergency rescue deals to stay afloat.

According to the analysis of 500 high streets by accountancy specialist PwC and the Local Data Company, 2,692 stores were shut between January and June.

Just 1,569 started up – a record low, the report said, because of plunging confidence.

The study concluded that town centres were enduring their worst period for five years.

The year to date has proved tough for the sector has it has battled the effects of rising costs from things such as rents, business rates and minimum pay requirements.

All that at a time when consumers have been feeling the pinch in the run-up to Brexit next year.

It has taken its toll on independent retailers but also larger chains.

Toys R Us and Maplin were two early casualties while Poundland and Coast have also collapsed.

House of Fraser was rescued from administration by Mike Ashley’s Sports Direct.

Among those to seek the closure of stores to save cash include M&S, Mothercare, Debenhams and Carpetright.

The casual dining sector has not been immune from the troubles with Jamie’s Italian, Byron, Prezzo and Gourmet Burger Kitchen all requiring help.

The government used the budget to announce some support – with £ pledged to cut business rates for smaller shops.

Critics responded by suggesting the chancellor should have gone further to immediately close a tax disparity between the high street and major online-only rivals.

The report said it was unclear whether the planned aid would be enough to help arrest the decline.

Lisa Hooker, consumer markets leader at PwC, said: “The continued rate of store closures reflects the new reality of that many of us prefer to shop online and increasingly eat, drink and entertain at home.

“The high street is adapting to an overcapacity in retail and leisure space resulting from these channel shifts.

“Openings simply aren’t replacing the closures at a fast enough rate. Specifically, the openings across ‘experiential’ chains, such as ice cream parlours, beauty salons and vape shops, haven’t been enough to offset closures in the more traditional categories.

“Looking ahead, the turmoil facing the sector is unlikely to abate. Store closures in H2 (the second half of the year) due to administrations and CVAs (Company Voluntary Arrangements) already announced will further intensify the situation.”

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