Published on October 20th, 2020 | by The GC Team0
Shop closures reach record levels but opportunity knocks (for some)
Consistent demand remains for retail, hospitality and services that can only be delivered physically, despite store closures in the first half of 2020 hitting record levels.
According to research by the Local Data Company and PwC UK, 11,120 chain operator outlets have closed this year so far. With 5,119 shops opening, this creates a net decline of 6,001 compared to the decline of 3,509 tracked last year.
After a challenging and changing year for retail and leisure due to the pandemic, many outlets have closed either temporarily or permanently and COVID-19 has been largely responsible for accelerating previous trends in shopping behaviour, encouraging more consumers to shop online.
However, according to LDA and PwC, store openings of multiples, which have remained at broadly the same level over the past five years, also show that despite the acceleration in closures in 2020, there remains consistent demand for retail, hospitality and services that can only be delivered physically.
A few positives
Lisa Hooker, consumer markets leader at PwC, said: “We all knew that consumers were shifting to shopping online or changing their priorities in terms of the things they buy, but what COVID-19 has done is create a step-change in these underlying trends to where they have now become the new normal.”
Hooker added that, while it’s challenging for many, the results do prove a few positive things.
“Firstly,” she says, “there’s been a resurgence of interest in local high streets. The practicalities of lockdown and the increase in working from home mean that independent shops tend to be located where consumers increasingly are.
“Plus, a steady flow of openings, with the continued roll out of value retailers, the boom in takeaways and pizza delivery shops and demand for services that can still only be delivered locally such as tradesmen outlets, building products or locksmiths, shows that despite the stark numbers there remains a future for physical stores.
“We all still want and need to physically visit shops and leisure operators. It’s likely then that whatever happens retail will come out of this smaller but stronger”
Worse to come
But, as the old saying goes, things will get worse before they get better…
According to Lucy Stainton, head of retail and strategic partnerships at The Local Data Company, the half-year results are a stark reminder of the challenges faced by retailers. “There are signs that this is just the tip of the iceberg,” she warned, noting that 22% of the multiple market is still closed temporarily.
“With each week that passes since retail and hospitality businesses were given the green light to reopen, the likelihood of these occupiers ever trading again in those units reduces. This, alongside the impact of local lockdowns and other restrictions such as the 10pm curfew will continue to have a devastating impact on the sector with more closures likely to fall in Q1 2021 following the busier golden quarter.”
Once in a lifetime opportunity
Jonathan House, devolved and local government lead partner at PwC, said: “There’s a once in a lifetime opportunity to reimagine high streets that are at the heart of our local communities and local economies. The high street won’t go back to how it was and can’t recover through the retail sector alone. Businesses, communities, local and central government need to come together and create liveable, vibrant and different places where people want to live, work and visit.”