British high streets are seeing shop closures at a rate of 14 per day.
According to new research by PwC, in the first half of 2018 only 1,569 shops opened, compared to 2,692 closures, which equates to a net loss of 1,123 stores.
These record levels are due to a combination of growth in online shopping, shift to in-home leisure, heightened restructuring activity and ongoing digitisation of services, the report says.
Closures were most marked in categories affected by online shopping – such as electricals outlets and fashion stores).
Lisa Hooker, consumer markets leader at PwC, said: “Our latest research highlights the challenges facing the retail and leisure sectors on Britain’s high streets. The continued rate of store closures reflects the new reality that many of us prefer to shop online.
“Openings simply aren’t replacing the closures at a fast enough rate. Looking ahead, the turmoil facing the sector is unlikely to abate. Store closures already announced in the second half of the year due to administrations and CVAs already will further intensify the situation.”
Ms Hooker also warned that the British high street is “in urgent need of new ways of thinking and new forms of retail”.
The data, compiled for PwC by the Local Data Company (LDC), reveals that across multiple retailers in 500 town centres, the impact of CVAs and retail administrations has introduced new categories to the fallers list – electrical goods are a particular highlight from this list. (This is due to the demise of Maplin; more than 50 of its stores were among the top 500 locations assessed in this research).
Greater London saw the largest number of net closures across all the regions, followed by the south east region. Wales was the best performing area, seeing the lowest overall net decrease in chains of -22.
Zelf Hussain, retail restructuring partner at PwC, commented: “The transformation of the UK high street – both physical and virtual – raises questions about how legacy retailers and leisure operators should restructure and what new investment is needed. The number of distressed businesses in 2018 has led to a spike in company voluntary arrangements.
“With the impact of some recently announced CVAs yet to feed through, alongside the peak time period for new CVA announcements being the first quarter of the New Year, we should brace for more high street closures in the coming months.”