Net store closures in Great Britain accelerate, but hospitality sees a much-needed rise

• 39 chain outlets closing each day, with 25 new outlets opening

• Net closures of 14 a day - higher than 2022 (10 per day), but an improvement on 2018-21

• Openings accelerated back to pre-pandemic levels, driven by hospitality (5 of the top 7 fastest growing categories), in retail park and other out-of-town locations

• Closures largely due to services such as banks and betting shops moving online, as well as large-scale restructurings and administrations in other categories

PwC has launched its latest figures for stores opening and closing across Great Britain using research undertaken by Local Data Company. The bi-annual report tracks over 200,000 outlets in over 3,500 locations to gain a picture of the changing landscape of high streets, shopping centres, retail parks, and other out-of-town areas.

The latest research finds that the country has witnessed an increase in both openings and closures in 2023 compared with the previous year. The acceleration in store closures can primarily be attributed to one-off large-scale restructuring in parts of retail and hospitality. There were a total of 14,081 store closures in 2023, averaging at 39 closures per day. The figure is higher than 2022’s total of 11,530, but lower than every year between 2017 and 2021, and in line with the 2016 figure (14,439).

On a positive note, 9,138 new stores opened across Great Britain in 2023 - the highest figure since 2019, illustrating the continued importance of physical sites, with successful operators taking advantage of vacant space to expand their footprints. This averages at 25 new stores opening each day across England, Scotland and Wales combined.

The net number of closures in 2023 sits at -14 per day (4,943 in total), a higher figure than 2022 but lower than the 2018-2021 period. 

Despite the overall decline, there has been a notable rebound in the hospitality sector, leading to a surge in new openings to meet consumer demand post-pandemic. Indeed, five of the top seven categories of new openings were in this sector. Takeaways (+151), food-to-go (+131), cafes (+104), coffee shops (+74) and restaurants (+21) all flourished in 2023.

This resurgence in hospitality comes as a welcome relief after the pandemic-induced closures of chains in some of these categories, and contrasts with the well-publicised challenges faced by some independent operators in the face of rising energy and other costs.

The other top growing categories are supermarkets (+40, primarily due to the opening of discount supermarkets) and petrol stations (+48, with the rollout of EV charging stations offsetting a decline in traditional petrol forecourts).

The majority of these new openings are located in retail parks and other out-of-town or edge-of-town locations (e.g. drive-thrus), rather than on high streets. In fact, the number of retail park chain outlets grew slightly in 2023 (+0.3%), while there were declines in high streets (-3.3%) and shopping centres (-2.5%).

As in previous years, many of the closures were shaped by structural shifts in how consumers engage with services. There has been a continued structural shift towards online platforms by banks (-583 in 2023) and betting companies (-193), albeit with lower net closure rates than in previous years. With the introduction of joint community banking hubs -  representing multiple banks in a single location -  and  enhanced digital capabilities, the sector is seemingly adapting to consumer behaviour which has seen an uptick in online "shopping around", resulting in a noticeable reduction in branch visits.

The other main categories of chain closures were driven by one-off, large-scale restructurings or administrations of major operators, some of which had been struggling for several years. In the case of pubs (net decline of -722 in 2023), variety retailers (-418) and cards & stationery retailers (-170), none of these were in the top 20 declining categories in 2022, and they are not expected to be amongst the worst performers in 2024.

While fashion retailers (-325) saw two large chains fall into administration earlier in 2023, the net decline is substantially lower than in the middle of the pandemic in 2021, when almost 1,400 chain outlets closed.

In the worst two performing categories of pharmacies (-787) and pubs, some of these outlets have been taken over by independent operators or are being marketed to other chains, so the overall loss of outlets will be smaller once those restructurings are completed.

Interestingly, PwC’s own analysis highlights that the decline in physical retail outlets mirrors the proportion of consumers choosing to shop online for non-grocery items. In 2015, just under £8 in every £10 of non-grocery spending was spent in stores, dropping to £6 in 2023 as more shoppers have chosen to buy online. The average 3% annual decline in ‘comparison retail’ outlets, which includes categories like fashion, household and electricals, matches the rise in online shopping over the same period.

Lisa Hooker, Leader of Industry for Consumer Markets, points to the opportunities that the new landscape presents for those who want to maximise their profits in 2024:

“A combination of the lagged impact of the pandemic together with inflation across the cost base has seen an acceleration in chain stores exiting the market in 2023 at 14 stores a day and some disappointing results across the independents sector. We believe the step-up in net closures reflects more one-off failures and will improve this year. It also shows the impact of the trend of wanting to shop and consume services seamlessly across different channels with longer-term growth in spending online mirroring the annual net closures in physical sites. There are some bright spots in terms of net openings of leisure operators and in retail parks, reflecting our desire for experiences over ‘stuff’, as well as for convenience.

Overall this does suggest a continued need for retailers, landlords and the local government to work together to understand why consumers prefer retail parks and how they can revitalise and reposition high streets to meet future consumer needs; and also for our industry to embrace the latest technology and use of data to win the battle for share of wallet and stomach.”

Lucy Stainton, Commercial Director for the Local Data Company who collect the research, talks about the 2023 data: 

“The notable aspect of these latest figures is the substantial rise in overall market activity throughout 2023. 2022 by comparison saw much more moderate volumes of churn, but as we look at last year, both store opening numbers and store closure numbers had both increased dramatically. Many larger operators were still repositioning and consolidating their portfolios, as consumer spending remained cautious, resulting in more closures than openings.This activity, alongside shorter average lease lengths and some corners of the market, predominantly in the leisure space, looking to take advantage of changing consumer habits and a more flexible property market, all contributed to much higher activity levels on both sides. Whilst we’re still facing sustained economic headwinds alongside some political uncertainty this year, the increasing store openings suggests we may see this gap close somewhat as we move through 2024.”

The retail industry continues to adapt and evolve in response to changing consumer behaviours and market dynamics. While closures are expected to persist, the sector remains resilient, with opportunities for growth and innovation.

^{Notes to editors:}

^{1. The Local Data Company tracked 206,036 outlets operated by multiple operators across Great Britain, between January and December 2023.}

^{2. Multiples are ‘chain outlets’ that have 5 or more outlets nationally. The openings and closures of Independent retailers will be covered by LDC in its forthcoming research on the 21st March 2023: https://bit.ly/3TihFUa}

^{3. Net change is openings less closures. The percentage change is derived from the net change figure relative to the total number of live multiple businesses.}

^{4. The analysis is derived from The Local Data Company visiting 3,322 high streets, shopping centres and retail parks across Great Britain. Each premises was visited and its occupancy status recorded as occupied, vacant or demolished. Vacant units are those units which did not possess a trading business at that location on the day visited.}