The digital barrage faced by Britain’s high streets is far from over, with stores closing faster than ever. Last year a net 987 shops disappeared, three times as many than in 2013, according to a report from PwC and the Local Data Company.
Overall 5,839 outlets closed and 4,852 opened, as the mix of businesses changed to reflect changes in consumer habits. Pawnbrokers, mobile phone shops and travel agents all felt the squeeze as shoppers headed online.
‘Regulation has blindsided the money shops, the advance of technology has hammered some phone operators and the internet continues to dent the clothing sector,’ said Mike Jervis, an insolvency partner and retail specialist at PwC.
‘Despite the benign economy, the net loss of shops has accelerated. The insolvencies of Phones4U, Blockbuster, Albemarle & Bond, and La Senza, a diverse cross-section of the retail market, epitomise these factors.‘
In their place, retailers whose businesses are harder to replicate online have been boosted. There's been a surge in restaurants, particularly British and American-themed ones like Ed's Easy Diner and Coast to Coast, and a 3.35% rise in the number of coffee shops. ‘Postal, packaging & shipping shops’ are up by around 20% as click and collect has taken off. This has been reflected in the national roll-out of Doddle, Network Rail’s chain of parcel shops.
'Customers are embracing new mobile technologies, traditional retail channels to market are being wiped out and new channels are being created, often in the online rather than the "real" world,' said PwC's head of retail, Mark Hudson. 'We should expect the rate of closures to continue.'
Of course competition is only one of the problems faced by today’s bricks and mortar retailers. For many, the cost of business rates outweighs even what they have to pay in rent, even if they’re not turning a profit.
After years of complaints it today seems the Government is finally considering doing something about the problem, announcing the ‘most wide-ranging review of national business rates in a generation,’ which could lead to largescale of reform of the property tax.
‘The time has come for a radical review of this important tax,’ said Danny Alexander, the chief secretary to the treasury. ‘We want to ensure the business rates system is fair, efficient and effective.’
But these things take time and judging by the Lib Dems’ poll ratings it seems the chances are that Alexander will be out of a job by the time the review reports in March next year. MT won’t be holding its breath.