According to a survey carried out by PwC and the Local Data Company, which monitored store closures across 500 town centres across the UK, there are 1,779 fewer stores on the high streets than there were, compared with just 174 fewer in 2011. That's 7,337 store closures less 5,558 store openings - the equivalent of losing 131 football pitches of active retail estate. The South East, West Midlands and North West were worst hit, with 376, 265 and 215 more closures than openings respectively.
Worst hit on the high street are jewellers, health food shops, travel agents, and sports goods shops. Jewellery sales have suffered as consumers’ real pay has fallen. Travel agents have found their business eroded by online competition, and health food shops have found that consumers are no longer willing to experiment with their overpriced linseed and £50.99 mystical supplements. Card and poster shops are also dropping like flies.
Bank branches, computer game stores and clothing stores are suffering too. The former is hardy shocking, giving the vast pay-outs over the Libor and PPI scandals. Only today, RBS announced losses of £5.2bn. The UK’s leading videogame retailer, Game, went bust only last year, and its shops have all but disappeared from British streets.
But there are a few winners on the high street: pound shops, pawnbrokers, charity shops, cheque cashing and payday loan companies, and betting shops, as well as supermarkets and coffee shops are on the rise.
Things are going to get much, much worse before they get better too. The number of store closures is predicted to rise to up to 28 a day, as so-called zombie firms – the unproductive firms that have stayed in business only because of low interest rates over the past couple of years - give up the ghost.
Matthew Hopkinson, director of The Local Data Company, says: ‘The end of 2012 and the beginning of 2013 has seen the most dramatic period on record as companies controlling more than 1,400 shops went into administration. We can expect to see this trend continue and indeed accelerate in 2013 as more leases come up for renewal.’
All in all, the research paints a fairly grisly picture of the future of the UK high street, packed with pawnbrokers promising a ‘fair’ price for the family jewels, payday loans companies charging extortionate sums to tide you over will the end of the month, and pound shops, with billboards screaming, ‘Bargain!’ while charging you £1 for 16p paracetamol.
Still, it could be worse. All these empty shops could provide an opportunity for smaller local enterprises to move in - if (and it's a big if) landlords see sense over rental prices. And at least the charities will be raking in record sums from our cast-offs. MT predicts that the Nora Batty look will be the ‘recession chic’ of 2013….