The UK’s high streets suffered more store closures in 2017 than in any year since 2010, as fashion retailers, shoe shops, travel agents and estate agents have been driven out by the rise of internet shopping.
A net 1,700 chain shops closed their doors in 2017, according to analysis of the UK’s top 500 towns compiled by the Local Data Company (LDC) for PricewaterhouseCoopers. An average of 11 stores a day opened, while 16 a day closed. The data does not include independent shops.
Fashion and footwear stores were the hardest hit in 2017, according to LDC, as shoppers’ freedom to spend on non-essentials was diminished by rising food price inflation, partly fuelled by the fall in the value of the pound after the vote for Brexit in 2016.
Overall spending on clothing and footwear has fallen by about 2% in the past two years, according to data from analysts at Kantar, with rapid growth in online spending mirrored by sliding sales in stores.
However, there was a net rise in the number of beauty stores in 2017, while cafes, coffee shops, ice-cream parlours and bookstores also increased in number, according to the LDC data.
The pace of closures increased substantially in the second half of last year, reflecting the switch to online shopping, combined with rising staff and business rates costs. Shoppers reined in spending, with consumer confidence reaching a four-year low in December.
Lisa Hooker, consumer markets leader at PwC, 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.”
The problems have continued into the first quarter of 2018, which PwC said was the toughest first quarter since the last recession in 2009-10. Big names including Toys R Us and Bargain Booze owner Conviviality have fallen into administration, while New Look is closing dozens of stores in a major restructure. Mothercare, Carpetright and Homebase are all considering closing dozens of stores. On Tuesday, lingerie brand Ultimo confirmed that it is to be wound up, blaming “more cautious consumer spending”.
Shoe chains Brantano and Jones Bootmaker called in administrators last year, resulting in the closure of about 170 stores in total, while discount fashion chain Store Twenty One went into liquidation, closing 125 outlets. Jaeger and Style Group, which includes Jacques Vert and Windsmoor, also closed some shops despite being rescued from administration.
Some bigger chains including Clarks, Marks & Spencer and Debenhams have closed a handful of stores as shoppers increasingly opt to browse and buy clothing via their smartphone or laptop.
Glen Took, consumer insight director at Kantar, said clothing and footwear retailers’ troubles reflected a change in culture towards enjoying experiences rather than buying products. “People are trying to make the most of their time doing something with family or friends and then they go shopping on a Sunday evening on the internet. If you look at social media culture, if you are going to have an amazing time doing something you can put on Instagram, what is going to give? It could be you are going to wear the same shoes you wore last week.”
The Works discount bookshop chain drove the growth in bookstores, while WH Smith has been adding new specialist book sites as readers return to physical books while sales of ebooks have slowed.
But the rise of online services spurred a dramatic drop in the number of banks, travel agents and estate agents on British high streets last year. Travel agency chains were hit by the highest number of net closures – 326 – while 201 banks, including more than 60 HSBC branches, shut their doors.
With the ability to access goods and services quickly from home, families have less reason to hit the high street and are more likely to buy items only when they need them rather than picking up something on impulse or planning ahead.
High street expert Mary Portas said the government could help by cutting business rates, but retailers needed to adapt or die. “We are going through a massive transition. Businesses that are going down are sometimes too big to be nimble and responsive and sometimes they are just mediocre and they haven’t invested in what consumers want. It is about being innovative and creative.”