There were 15 shop closures a day across the UK in the first half of 2016 and the number of new openings has fallen to the lowest level for five years, according to a PWC report that highlights the pressure on the retail sector.
Fashion shops are struggling, with 206 closing in the first half of the year and only 119 opening, leading to a net decline of 87. In contrast, tobacconists increased by a net of 28, with 60 openings and 32 closures, while estate agents added 26 sites and jewellers 24.
The period covered by the report, which was produced by accountancy firm PwC and the Local Data Company, includes the collapse of BHS into administration. However, the last 22 of BHS’s 164 shops did not close until the end of August.
Matthew Hopkinson, the director of the Local Data Company, said: “The spaces left by the traditional occupants of our high streets are being increasingly filled by health care operators, food and beverage operators and the ongoing rise of the discounters.”
High streets across the UK are under pressure from a shift in spending from physical shops to online, a squeeze on household income, and increases in business rates and the national living wage, which has increased costs.
Richard Hyman, a retail analyst, said there were too many shops in Britain. About 64% of retailers in Britain were holding sales last week as they tried to shift unsold stock, according to research conducted by Hyman.
“This is the toughest retail market we have ever seen by some distance,” he said. “But we have seen nothing yet; next year will be worse. I have been going on about this for ages, but there is oversupply. Their are too many shops and online shops. ‘Build it and they will come’ might be true in Field of Dreams, but in business you can’t carry on doing that. We have got the most promotional market that anyone has ever seen.”
The PwC and Local Data Company report found that 2,656 outlets closed on Britain’s high streets in the first half of the year. This was a rate of 15 stores a day, up from 14 a day in the same period in 2015.
New openings fell from 2,197 to 2,153, the lowest since 2011. This meant that a net 503 shops disappeared from high streets during the period, the biggest decline since the first half of 2012.
Greater London saw the biggest net drop in the country as 164 shops were lost. The report claimed that retailers may be preparing for an increase in business rates from next year. No area of the UK enjoyed an increase in the number of shops, although the north-east of England lost just five.