Nearly 50 shops shut down a day in 2022

New figures from the Centre for Retail Research (CRR) showed that there was a sharp rise in the number of shops closing on the high streets, shopping parades, and out-of-town shopping parks in 2022.

More than 17,000 sites shut up in 2022, the highest number for five years. Total closures were nearly 50% higher than in 2021. More than 150,000 jobs were lost, up 43% compared to the previous year, in stores and online, also jumped as businesses closed or cut costs.

At the height of the pandemic some businesses were protected through government support and the furlough scheme, which helped to pay wages when shops could not open. However, in 2022 as the economy continued to reopen, the retail sector faced a barrage of challenges.

Prices rose sharply and shoppers reined in their spending. Costs for retailers also rose, with steep increases in energy and wage bills in particular.

The CRR found that shops were closing at a rate of 47 per day in 2022. Over the course of the year, large retail chains closed 6,055 shops while 11,090 shops were closed by independents. However, only around a third of closures were due to insolvencies.

The number of stores closing because a parent chain with more than 10 stores went under, actually fell, the CRR said. Closures in that category were 56% lower in 2022 than in 2021.

Nearly a third of the closures were branches of chains which were closing some of their sites to save money and rationalise the business. Some, such as Marks and Spencer, simultaneously opened new branches in different locations. More than a third of closures were independent shops that decided to wind up their business, also classed as rationalisation.

CRR director Joshua Bamfield said “Rather than company failure, rationalisation now seems to be the main driver for closures as retailers continue to reduce their cost base at pace.”

From April, retailers will receive temporary support from the government with business rates, the tax charged according to the value of the firm’s properties. That will be in the form of a 75% discount on business rates up to a limit of £110,000 per business.

Shops standing vacant are exempt from rates altogether for three months. After that, however, they are subject to the full rate charge, and are not eligible for the 75% discount.