According to research conducted by the Local Data Company and PwC UK, the UK is experiencing a record level of store closures. The first half of 2020 saw a significant increase in net store closures compared to the previous year, indicating the challenges faced by the retail and leisure sectors. The ongoing impact of Covid-19 has greatly influenced consumer behavior and exacerbated existing changes in shopping habits.

From January to August 2020, a total of 11,120 chain-operated outlets closed, while only 5,119 new shops opened, resulting in a net decline of 6,001. This represents almost double the decline recorded in the same period last year. Lisa Hooker, consumer markets leader at PwC, acknowledged that the pandemic has accelerated changes in shopping behavior and compelled retailers to experiment with new strategies in response to Covid-19 restrictions.

While certain sectors have demonstrated more resilience than others, value retailers and discount supermarkets have managed to fare better, as consumer demand for affordable options has increased. The report also predicts that the leisure sector, particularly takeaways and pizza delivery shops, will remain strong.

Lucy Stainton, head of retail and strategic partnerships at the Local Data Company, highlighted the challenges faced by retailers during the first half of 2020, including the national lockdown. She also mentioned that the longer it takes for retail and hospitality businesses to reopen in the same units, the less likely it becomes. Local lockdowns and other restrictions, such as the 10pm curfew, are expected to continue having a devastating impact on the sector, leading to further closures in the first quarter of 2021.

Despite the difficult circumstances, there are some positive aspects showcased in the report. Lockdown measures and the increase in remote working have revitalized interest in local high streets. This offers an opportunity for retailers to innovate and adapt to evolving consumer habits. Additionally, prime properties are available, and consumer spending has increased, providing agile retailers with a chance to weather the storm.

Jonathan House, devolved and local government lead partner at PwC, emphasized the importance of local leaders collaborating with businesses to create a new vision for high streets in the UK. He believes there is a unique opportunity to reimagine high streets as vibrant and essential parts of local communities and economies. House suggests that collaboration between businesses, communities, and both local and central government will be crucial in creating livable and appealing spaces that people want to live, work, and visit.

Useful links:
1. BBC – UK Store Closures Reach Record Levels in 2020
2. Financial Times – UK Store Closures Surge to Record High in First Half of 2020