Facebook Twitter LinkedIn YouTube
East Midlands Chamber News

High street decline accelerated in 2017

High streets across the East Midlands’ ended 2017 with 128 fewer retail outlets than at the start of the year, PwC research compiled by the Local Data Company (LDC) reveals.

That’s twice the level of 2016, when the region saw a net loss of 64 store closures - the third consecutive year of shrinking retail activity.

New store openings on high streets, retail parks and shopping centres were also the lowest for three years, down from 285 in 2015 and 289 in 2016.

In 2017, 271 new shops opened, but there were 399 closures, leaving the East Midlands with 128 fewer retail outlets..

The analysis tracked 4,495 outlets in the East Midlands operated by multiple retailers in 34 town centres across the region.

The data also showed that the second half of 2017 saw substantially more closures and fewer openings than the first six months of the year, reflecting a tough trading environment including a slowdown in consumer spending, rising staff and business rates costs and a slowdown in food and beverage growth as consumer confidence reached a four year low in December 2017.

Nationally, These findings equate to a net loss of 1,772 stores disappearing from Great Britain’s town centres in 2017.

There was, however, some growth on the high street, with beauty product stores, coffee shops, cafés & tearooms and ice cream parlours showing the highest increase in net store numbers in 2017. Booksellers and tobacconists also had a good year and physical book shops and vaping remained popular with consumers.

Andy LyonAndy Lyon, Leader of PwC's retail and consumer practice in the Midlands said: "2017 has proved to be one of the toughest trading periods East Midlands retailers have experienced in years - borne out by an 8.6% rise in store closures with high street names such as Twenty One going into liquidation and others such as Maplins and Toys R Us facing a similar fate. However, the East Midlands is still one of the strongest regions after London in terms of growth.

“We saw volatility from month to month, and across different sectors as wage growth failed to keep up with inflation - forcing many shoppers to think more carefully about their spending habits.

“On top of this, many retailers are increasingly feeling the impact of the acceleration of online shopping as consumers begin to feel more comfortable with the price transparency and reliability of delivery options offered by online players. Digital offerings are increasingly becoming make or break in areas like fashion, but also for banks, travel agents and estate agents – all of which closed a significant number of high street stores last year.

"For these industries, store closures are less driven by the market environment and are instead part of much bigger structural changes happening, as customers increasingly expect to interact with their service providers online or via apps.

“We’ve already seen a tough start to 2018, but it’s important to remember the British high street still plays a vital role in society – and that there are elements of growth among the headline numbers of decline.

“Retailers and leisure operators need to continue to look at their businesses - including their store portfolios - to make sure they have a clear brand and product offering. The winners at the moment, such as nail bars, coffee shops, bookstores and craft beer pubs, are all flourishing because they serve the needs of emerging consumer segments, such as experience-seeking millennials and offer a differentiated physical proposition that online can’t compete with.

“The British high street is undoubtedly facing headwinds, but retailers are waking up to the challenge and reimagining the future. The winners will be those who are agile and open minded in working out the best way to ensure their stores differentiate themselves and earn their place on the high street.”

The analysis of the top 500 town centres in Great Britain included 67,157 outlets run by retailers with more than five outlets across the country. It found that overall volumes of activity (openings + closures) have plummeted from a record 13,109 in 2012 to 9,938 in 2017 (-24%), although 2017 activity was up slightly compared to 2016 when 9,964 outlets opened or closed.

Andy Lyon, continued: "Many retailers are using restructuring and insolvency tools as a way to resize their store numbers. Survivors and thrivers will be those who address their cost issues and have a compelling 'bricks + clicks' offering to help them meet changing consumer trends and compete with online retailers who don't have the same legacy cost issues."

Chesterfield fared the worst over the period with 12 openings and 25 closures a net decline of 13 stores, Nottingham saw 34 openings and 44 closures a net decline of ten stores. East Retford and Coalville also experienced a a net decline of ten stores, with four openings for East Retford and three in Coalville and 14 and 13 closures respectively. However, Market Harborough saw a net growth of five stores from nine openings and four closures.

Back