Home Business News Greater London sees highest number of store closures in five years

Greater London sees highest number of store closures in five years

by LLB Reporter
10th Apr 19 1:13 pm

Last year Greater London experienced the largest number of store closures in five years as consumers respond to the changing retail climate and continued economic uncertainty, according to PwC research compiled by the Local Data Company (LDC).

This is reflected throughout Great Britain, with a record net 2,481 stores disappearing from the top 500 high streets in 2018. In total, 3,372 shops opened, compared to 5,833 closures. (2017 net loss: -1,772 stores), according to the research.

Between January to December 2018 931 stores opened and 1459 closed in Greater London, resulting in a net decrease of 528. Whilst this is the biggest net fall in the UK, in terms of net change on the high street this is -2.87%, the most positive result of any UK region.

The areas most affected by closures were Balaan Street, Plaistow, Forest Gate, Southfields, Welling and Stamford Hill (see Table 1). However, there was some good news, with areas such as Finchley, Tottenham and Caledonian Road seeing positive growth in 2018.

Despite large numbers of closures, some retailers have done better than others in 2018. Juice bars, health clubs, charity shops, bakers shops, ice cream parlours opened a number of new premises in the capital. However, banks and other financial institutions, fashion shops, public houses and inns and electrical goods stores were hardest hit in 2018 with considerable closures throughout Greater London.

Table 1: Greater London areas with the highest net change % in 2018

Greater London area Businesses Jan 2018 Businesses Dec 2018 Net Change % Units Net Change Openings Closures
Balaam Street, Plaistow 13 11 -15.38 -2 0 2
Forest Gate 23 20 -13.04 -3 0 3
Southfields 33 29 -12.12 -4 0 4
Welling 48 43 -10.42 -5 1 6
Stamford Hill 20 18 -10 -2 0 2
Northwood 31 28 -9.68 -3 2 5
Temple Fortune 21 19 -9.52 -2 1 3
East Dulwich 32 29 -9.38 -3 0 3
Kilburn 109 100 -8.26 -9 3 12
Dalston 73 67 -8.22 -6 5 11

(Source: Local Data Company)

Craig Skelton, retail and hospitality partner at PwC said, “The market has seen many challenges in recent times, particularly footfall decline in the high street, higher operating costs, and reduced consumer confidence. Historically  Greater London has been less susceptible than other UK regions. This appears to have changed, being hit hard by recent store closures. There have been a number of notable casualties, coupled with a lack of openings.  No doubt the current political and economic uncertainty hasn’t helped.

“Local authorities, landlords, and tenants need to think more about how the high street space is used. Diversity and variety of use is key, and the focus should not be solely on the retail store. Retailers need to think more about the use of technology, both in and out of store, and they need to focus their attention on how the consumer shops. I think we will see more collaborations across brands and indeed industries.”

Across Great Britain

The number of store openings by multiple retailers on Great Britain’s top 500 high streets  has dropped by 17.4% year on year with the current rate of openings at nine stores per day. This also represents a 44% decrease from the 16 stores per day opening in 2013.

Relative to 2017, the rate of store closures in 2018 remained at 16 stores a day. However, the shortfall between openings and closures reached its highest level since the beginning of the decade, as withdrawals from the high street were further dented by a historic low number of store openings.

Zelf Hussain, retail restructuring partner at PwC said, “Several national chains weathered company voluntary arrangements or administrations as retailers toiled in the tough climate of 2018. Retail companies looking to survive let alone flourish in 2019 face an uphill battle.

“We have already seen several casualties in 2019 and there will undoubtedly be more, most likely in all categories except for groceries. Those retailers who will give themselves the best chance of survival must focus on having the relevant proposition, and the investments needed to deliver this proposition; the optimal mix of channels and business portfolio; flexible leases.

“Additionally, we believe CVAs are not the answer in isolation. Companies need solutions that fully address customer needs, represent sustainable cost savings and, if needed new money investment to bridge the lag between the cost of a restructuring and long-term performance improvements.”

Table 2. Openings and closures of multiple retailers by region across the top 500 GB town centres in 2018

English Region Number of store openings Number of store closures 2018 net change 2017 net change
East Midlands 243 436 -193 -128
East of England 284 470 -186 -184
Greater London 931 1,459 -528 -336
North East 97 231 -134 -100
North West 311 555 -244 -175
Scotland 146 265 -119 -148
South East 523 922 -399 -185
South West 274 479 -205 -152
Wales 85 144 -59 -53
West Midlands 287 475 -188 -144
Yorkshire and the Humber 191 417 -226 -167
Total 3,372 5,853 -2,481 -1,772

 (Source: Local Data Company)

Greater London saw the largest number of net closures across all the regions, with fashion retailers closing the most in the capital (-79 units). Scotland was the only region to see a drop in its net closures, dropping from, 148 in 2017 to, 119 in 2018. Wales was the best performing region, posting the lowest overall net decrease in chains of -59.

Lucy Stainton, senior relationship manager, head of retail and strategic partnerships at The Local Data Company said, “A key trend from this latest analysis is the increased loss in leisure units across the top 500 towns. We identified the start of this decline in H2 last year and sadly this has worsened due to an incredibly competitive marketplace and rising operating costs.

“We anticipate further losses in the leisure sector as brands which fail to entice customers to spend across multiple trading periods -breakfast, lunch and evening- close stores for good.

“Also, key to note is that the two regions that were previously less susceptible to market challenges, Greater London and the South East, are now the two that have been hit the hardest by store closures.

“However, there are still green shoots breathing life into this sector with brands trialling new grab-and-go concepts. It will be increasingly important for leisure operators to be agile to keep their offer relevant. Bricks and mortar has a strong future- but not as we know it. Stores and shopping destinations will continue evolving to better serve consumer demand, integrating as part of an online channel.”

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