High Street chain store closures soar, says research
- 28 February 2013
- From the section Business
The number of stores closed by retail chains in Britain has soared over the past 12 months, according to research.
Analysis from PwC and the Local Data Company revealed that the chains shut an average of 20 shops a day last year.
The figure increased in the last three months of 2012 as a spate of household names went into administration.
There was a decline in shops selling products such as computer games, cards and clothes, but a rise in payday loan providers, pound shops and bookmakers.
Convenience stores opened by supermarkets were also taking over empty units.
The survey found a reduction of nearly 1,800 shops for the whole of 2012, a 10-fold increase on the year before.
According to the study, more High Street chains fell into insolvency in 2012 than ever before.
High-profile administrations, such as Comet and Jessops, were not the only problem as other retailers also shed many stores when leases came up for renewal.
With the rise of online shopping the chains did not need as many stores as they did in the past, a trend that looks set to accelerate this year.
Matthew Hopkinson, from the Local Data Company, said: "People have got less money in their pockets, employment is tighter and also we've seen a massive growth in the supermarkets in terms of non-food retail, and we've seen the internet go from nothing to 12% of retail sales - and that's forecast to be at least 30% by 2020.
"So people are shopping less and they're going to alternative channels."
But Professor Cary Cooper, a psychologist from Lancaster University, warned that community cohesion was damaged by the decline of the High Street.
"It's important psychologically and socially for families and communities that we have this, and seeing empty shops, seeing the kinds of shops that are now on the High Street, doesn't encourage communities or families," he said.
The research found a total of 7,337 closures, compared with 5,558 new openings during the year.
The regional breakdown showed the most net closures in the south-east of England, where 1,654 closures and 1,278 openings resulted in the loss of 376 shops.
Scotland lost 353 and gained 276 shops, resulting in 77 net closures, while the figures for Wales showed a net loss of 65 shops following 213 closures and 148 openings.
The figures were based on a survey of 500 town centres.
BBC business correspondent Emma Simpson said the figures showed just how dramatic the fallout had been on Britain's High Streets.
"The scale of the net figure was something unheard of before the recession," she added.
Mike Jervis, insolvency partner and retail specialist at PwC, said: "The failed chains generally shared two problems - too many stores and too little multi-channel activity.
"A number of them had failed to deal with their underlying issues by hiding behind light touch restructuring processes, especially Company Voluntary Arrangements. 2013 has seen the downward trend become even worse."