What is going on?
Research from the Local Data Company (LDC) showed that a net total of 2,481 stores closed their doors in 2018, up more than 40% on the previous year’s figures and the first time the deficit has been above 2,400.
While 3,372 shops opened; 5,833 closed which is a ratio of 9 openings to 16 closures a day. A similar number of stores closed last year but fewer have opened to replace them.
A team member who worked with LDC on the survey said: “We saw an acceleration in footfall decline on the high street, with businesses continuing to see the impact of online shopping, increasing costs and subdued consumer spending.
“The marked reduction in openings has accelerated the net closure trend. In categories as diverse as fashion and financial services, new entrants are able to gain share by launching online – enabled by technology and consumer adoption of mobile and e-commerce – rather than be saddled with the costs and risks of opening on the high street.”
Banks and financial services underwent the biggest net closures as Lloyds, HSBC, RBS and others closed hundreds of branches across the country. Fashion retailers also suffered as East, Blue Inc and Jacques Vert closed down along with mass store closures by New Look.
No hoverboards yet?
“The high street of the future will be a more diverse space, not solely dependent on stores.
The analysis reflects this with the net growth of gyms and sports clubs, ice cream parlours and cake shops, in addition to initiatives to bring more shared office spaces and homes into what were traditionally shopping areas.
“However, it’s clear that the rate of openings is not currently enough to offset the closure of traditional retailers and services, so some tough decisions will need to be taken in the next few years.”
Only 15 out of 100 business types showed a net growth in outlet openings and of these only five (above) showed a net growth in double digits. Previous growth areas such as coffee shops, takeaway food, jewellers and beauty shops all saw declines last year.
Nearly every region of the UK saw increased net closures in 2018 apart from Scotland which had 29 less than the previous year. Greater London saw the greatest volume of net closures with 528 and Wales saw the least overall with 59.
Summary
Lucy Stainton, Head of Retail and Strategic Partnerships at The Local Data Company, said: “Bricks and mortar has a strong future – but not as we know it. Stores and shopping destinations will continue evolving to better serve consumer demand, integrating as part of an online channel.”
Not every store will follow this pattern. There are still some smart and prudent decisions you can take to make efficiencies and keep your business alive so it can thrive again.
Contact one of our expert team to arrange a free consultation where we can advise you on what options you have right now to help avoid your business becoming just another statistic.