10,000 retail chain stores close during pandemic

Just under 10,000 chain stores disappeared from Great Britain’s retail locations in 2020, amid a warning that the full impact of the pandemic is still to be felt as further ‘temporarily closed’ stores may not re-open.

In total, 7,655 shops opened, compared to 17,532 closures, a net decline of 9,877, according to PwC research compiled by the Local Data Company. Although a decline was to be expected in a pandemic, this is the worst ever seen with an average of 48 chain stores closing every day, and only 21 opening. The findings are bleak compared to five years ago in 2015, which saw net decline of just over 1,000, 50% more openings and 25% fewer closures than 2020.

Retail parks have seen the smallest number of net closures of any location (453), compared to high streets (4,690) and shopping centres (1,791). Footfall was already holding up better in retail parks before the pandemic due to their investment in leisure and some retail parks have benefitted by being anchored by essential retailers that have remained open, even during the tightest restrictions.

Shopping centres by contrast, are often poorly located for consumers who want to shop local and travel less to city centres, and are more likely to host fashion retailers and chain restaurants, which are the number one and three most hard-hit categories for net closure in 2020. Meanwhile, the drop off in high-street footfall has affected those multiple retailers located on high streets, particularly those in large city centres, although this decline in multiples has been partly offset by growth in interest of local and independent operators.

Small towns, which have long been in decline at the expense of more populous areas and cities, are now also enjoying a mini-renaissance. The research suggests that consumers now want to shop in these locations, and larger retailers want to be there.

Lisa Hooker, consumer markets lead at PwC, said: “For the first time, we’re seeing a widening gap between different types of locations: city centres and shopping centres are faltering, but certain retail parks with the right customer appeal are prospering.

“Location is more important than ever as we see a reversal of historical trends. For years, multiple operators have opened more sites in cities and closed units in smaller towns. As consumer behaviours and location preferences change, partly as a result of COVID-19, retailers are moving to be where they need to be. Small towns will remain important but we can expect recovery in cities as workers and tourists return, albeit in smaller numbers adopting more flexible working models.”

Despite the uncertainty and volatility of the past year, some operators are still expanding and finding the right physical stores in the right sector and the right location. For retail, the best performing categories include convenience, discount or essential operators, general merchandise value retailers that do not typically sell online, and local services that need to be located nearby, such as tradesmen or repair shops. For leisure, ‘convenient leisure’ categories have grown through takeaways, cake shops and coffee shops, particularly through a growth in drive-in coffee shops in retail parks and out of town locations.

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