Research indicates significant closures as nearly 7,000 stores shut down in early 2024.
- The closure rate marked an increase from the previous year, with 38 stores closing daily.
- Despite a slight rise in store openings, the net decline in outlets persists.
- Fashion retail saw a reduced closure rate, yet faced challenges from adverse weather.
- Online retail continued its ascent, affecting physical store viability.
In the first half of 2024, the retail industry in Great Britain witnessed the closure of 6,945 stores operated by multiples and chains, equating to 38 closures daily. This increase reflects a slight escalation from 2023 when 36 stores closed each day. However, the closure rate’s rise was tempered by a modest growth in store openings, which increased from 24 to 25 per day, signaling a semblance of stability in an otherwise declining market.
PWC’s research, supported by Green Street data, emphasizes the ongoing contraction of physical retail spaces, driven by consumers’ shift towards more numerous online transactions. The consultancy highlights fashion retail as having improved its closure rates significantly, though it bears noting that the sector still contends with the economic ramifications of atypically harsh weather conditions, which curtailed sales early in the year.
The digital retail domain saw substantial advancement, achieving non-food online penetration at its highest since late 2021. Contributing factors include the disruptive weather patterns and an enduring consumer preference for online shopping. The sustained lower footfall, reporting 15%-20% diminishment from pre-pandemic levels, has weighed heavily on the profitability of brick-and-mortar stores and hospitality enterprises. This decline is uniformly observed across various locales, with high streets notably impacted, seeing reduced visitor numbers monthly, barring a brief uptick in March due to the adjacent Easter holidays.
Despite widespread challenges, retail parks have manifested improved footfall, with chain outlet numbers experiencing a 0.4% growth in the first half of the year. Such developments underscore a nuanced shift in consumer behavior and space utilization, reflecting a trend where convenience and accessibility offered by retail parks are becoming increasingly attractive.
Consumer insight expert Lisa Hooker from PWC underscores the permanence of online retail’s dominance over physical store growth. As brands increasingly leverage data analytics to comprehend evolving customer needs, physical retail spaces are reimagining their environments to promote engagement, convenience, and excitement.
The ongoing evolution in retail dynamics underscores a gradual but persistent shift towards online shopping, with traditional stores striving to adapt to the changing landscape.
