The number of new high street stores opening in 2017 fell to 4,083, from 4,534 in 2016, according to research compiled by the Local Data Company (LDC) for PwC.
The data shows that the second half of 2017 saw substantially more closures and less 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, as well as a slowdown in food and beverage growth as consumer confidence reached a four year low in December 2017, according to GfK.
5,855 outlets closed on Great Britain’s high streets in 2017, at a rate of 16 stores a day, a slight increase on the 15 stores a day closing in 2016, when 5,430 outlets closed. It is the second consecutive year the number of closures have risen. The findings equate to an overall net loss of 1,772 stores disappearing from Great Britain’s town centres in 2017.
PwC consumer markets leader Lisa Hooker said: “2017 was tough for the British retail industry, particularly the second half of the year. 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.”
She continued: “We’ve seen a tough start to 2018, but it’s important to remember the British high street still plays a vital role in society and there are elements of growth amongst the headline numbers of decline. For example, almost 400 new clothes shops opened last year, even though over 700 closed. And, while four pubs a week closed, at the same time three a week opened.
“Retailers and leisure operators need to continue looking 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 offerings 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 slowdown in stores opening emphasises the highly digital and mobile market that retailers are operating in today,” he noted. “Retailers mustn’t be disheartened by these figures, as the high street still holds an incredibly important place in the UK’s retail landscape – we have to recognise however that it’s changing and adapt to it.
“A bricks and mortar presence is still relevant. We have seen traditional pureplay brands and retailers make a move onto the high street – Amazon for instance is opening up its own stores, manufacturers such as Apple and Dyson have created a ‘showroom’ experience and even Asos, which has shown a strong bump in sales, has ties to the high street with its click-and-collect services.
“Retailers need to re-think what the in-store experience means to them and their customers. It’s becoming more intrinsically linked with the customer experience; in fact, retailers need to think of them as one and the same, as that is how customers see it. The quality of in-store technology can indeed impact the loyalty of consumers and we’ve found 58% have even chosen to buy a product from a store because of a better in-store experience.
“Retailers can enhance the store by ensuring that they are thinking digitally with one holistic view over their entire operations, from the shop floor to the back-end systems through to the online store. The high street isn’t dead, it’s just growing up and retailers need to grow alongside it.”