Whilst volumes fell more shops closed than opened across the North West in 2016, says PwC and The Local Data Company

13/04/17

More stores closed than opened across the North West in 2016 as the high street responded to customer demand and continued economic uncertainty, according to PwC research compiled by the Local Data Company (LDC).

The analysis of 66,807 outlets operated by multiple retailers* in 500 town centres across Great Britain, found that in 2016, 333 shops opened and 410 closed across the North West. This equates to a net decrease of 77 shops – a trend that seems to have continued from 2015, albeit volumes were higher, where 378 outlets opened and 441 closed with a net reduction of 63 shops.

The 6 town centres in the North West area which saw the most positive net change in 2016, were Bolton, Burnley, Preston, Carlisle, Crewe and Macclesfield all experiencing more openings than closures (Table 1). Liverpool, Manchester, Lancaster, Blackpool, Barrow and Kendall had the highest net reduction in the North West, followed by Ashton under Lyne, Wilmslow, Wigan, Hale and Salford amongst others (Table 2).

Charity shops, beauty products and jewellers are amongst those growing at the fastest rate in the North West during 2016. The data also reveals that across multiple retailers in the 29 town centres analysed across the North West fashion shops, banks and other financial institutions and department stores have been amongst the hardest hit in 2016.

Table 1: North West towns with more openings than closures in 2016.

Town centre

Businesses Jan 2016

Businesses Dec 2016

Net change

Openings 

Closures

Bolton

194

199

5

21

16

Burnley

136

139

3

10

7

Preston

265

268

3

17

5

Carlisle

202

204

2

18

16

Crewe

149

151

2

7

5

Macclesfield

142

144

2

10

8

Table 2: North West towns with the highest net reduction in 2016.

Town centre

Businesses Jan 2016

Businesses Dec 2016

Net change

Openings 

Closures

Liverpool

624

612

-12

31

43

Manchester

804

792

-12

66

78

Lancaster

168

157

-11

11

22

Blackpool

223

215

-8

11

19

Barrow

132

125

-7

7

14

Kendal

148

141

-7

3

10

Source: Local Data Company

Mike Jervis, retail specialist at PwC, said:

“The research clearly highlights the changing face of town centres - leisure and experience destinations continue to replace traditional high street stalwarts. The insatiable appetite for fast food and coffee shops fills the void left by banks, mobile phone and clothing shops.

“Fashion is migrating to online at a faster rate than ever, leaving closures in its wake. Last year was relatively benign for restructuring and insolvency in all sub-sectors of retail, so the net closures points to structural changes in customer behaviour more so than a consumer slowdown.”

Commenting more broadly on the retail sector, Madeleine Thomson, retail and consumer leader at PwC, continued:

“2017 will be a crucial year for retailers. The combination of price inflation on goods and groceries will mean that brand loyalty will play a more significant role than ever. “However, with prices on the up and less disposable income available to the average UK consumer as a result, retailers will need to be versatile and savvy to increase footfall to their stores. Our Total Retail research** shows that almost half (48%) of UK shoppers buy online because they find it more convenient than visiting a shop. However, despite the fall in new store opening, consumers continue to place value on the in-store experience, with the number one in-store attribute being shop staff with a deep knowledge of their product range.

“As we look ahead, the ‘Total Retail’ experience looks to be defined as simple and streamlined; one that maintains a human touch, blending the best of technological advances with helpful and expert staff both in-store and online.”

Across Great Britain

In 2016, 5,430 outlets closed on Great Britain’s high streets, a rate of 15 stores a day, a slight increase on the 14 stores a day reported to have closed in 2015, when 5,138 outlets shut. However, the number of new openings has fallen to a record low (12 stores a day) since research began, partly due to uncertainty in the market in the lead up to the referendum vote. This equated to a net loss (difference between number of closures and openings) of 896 stores disappearing from Great Britain’s town centres in 2016, the highest net decline since 2012 when there was a net loss of 1,761 stores (See Figure 1).

Figure 1. Opening and closures of multiple retailer units, 2010-2016 

Source: Local Data Company

Table 3. Openings and closures of multiple retailers by region across the top 500 GB town centres in 2016

Country/

Number of store openings

Number of store closures

2015

net change

2016 net change

English Region*

East Midlands

 289

 353

-65

-64

East Of England

 413

 411

-75

2

Greater London

 1,153

1,385

-67

-232

North East

193

 207

-46

-14

North West

 333

 410

-63

-77

Scotland

 254

 366

-59

-112

South East

 688

 870

-71

-182

South West

 422

 492

 -49

 -70

Wales

 120

 146

-1

-26

West Midlands

 332

 392

-19

-60

Yorkshire and the Humber

 337

 398

 -17

 -61

Total

 4,534

 5,430

-498

-896

Source: Local Data Company

Greater London saw the biggest increase in net closures across all the regions. The capital’s net loss of stores increased to -232 stores in 2016, from -67 stores in 2015. Competition for units and saturation in certain London suburbs, saw the number of store closures rise from 1,242 to 1,385 (+143 stores). Expected increases in business rate valuations effective in 2017 and price inflation is likely to see this trend continue.

The East of England was the only region to see a increase in the number of multiples in 2016 (+2 stores). This was driven by the new Bond Street development in Chelmsford, which saw John Lewis open as well as several food and beverage outlets (e.g. Prezzo, Wagamama and Cote) and retail brands (e.g. Fat Face, Joules and White Stuff).

Matthew Hopkinson, Director of The Local Data Company, said:

“Town and city centres have seen the loss of chain retailers for the last seven years so it is no surprise to see this trend continue. What is of concern, however, is the significant slow-down in openings of chains on our high streets with many favouring out of town locations where large store formats, free parking and lower costs play to the all-important consideration of convenience. Conversely, however, 2016 did see the opening of big store out of town formats coming onto the high street such as Topps Tiles, B&Q and DFS. Costs of operating a shop be it people, taxes and rents have started to rise putting the importance of the right location right at the top of every retailer CEO’s mind.

“The significant loss of stores in London and the South East reflects the trend for fewer stores in high population areas, to stores in destination locations where instore experience and adjacency to other non-retailers, such as food, beverage and entertainment outlets, is what drives a successful shop.

“Leisure (food and beverage) outlets is the only business category that has seen growth in 2016 but this has also seen the significant slow-down in openings which is perhaps a reflection of a bubble starting to burst after years of significant growth.”

 

 

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