The number of shops closing their doors across Scotland’s high streets is accelerating, with more than five stores per week being lost in main shopping destinations in the first six months of the year - though the rate of new openings is also increasing.
A total of 140 shops closed between January and July, an increase of 30% on the same period in 2018. However, research compiled for PwC by the Local Data Company (LDC) shows a 58% increase in new openings, from 58 to 86 in the same period this year.
The research, which looks at the retail picture in eight of Scotland’s largest towns and cities, shows the number of shops has fallen from 3,184 in January to 3,130 in July, a net decline of 54. This represents a 1.7% fall in the overall number of shops, compared to -1.83% for the UK as a whole.
And while the result highlights the ongoing challenge facing Scotland’s local authorities as they collaborate with business to reshape the high street to fit a 21st century purpose, the net decline in percentage terms was lower than all but two of the 11 nations/regions which formed part of the analysis across Great Britain.
Looking to Scotland’s major cities, Glasgow saw the highest level of activity with 46 closures, in the first half of the year, being offset by 34 openings, resulting in a net change of -1.35%, a slight increase on the 1.22% recorded in the same period in 2018. These changes leave Glasgow city centre with 876 stores.
In Edinburgh there are now 1,033 shops, down from 1050 in January 2019, after 37 closures and 20 new openings. This gives the capital a net change of -1.65%, however the planned opening of the £1bn St James Centre is expected to provide Edinburgh’s retail environment a major boost in 2020.
Scotland’s third largest city, Aberdeen, also performed better than the Scottish average, with a -1.53% net change, following 20 outlets closing and 13 opening.
Elsewhere, Perth saw 12 closures and seven openings, Falkirk lost three stores with no new openings over the six month period. In Paisley, 10 shops closed and four opened, while in Ayr there were also four openings, against eight closures.
Dundee was the only city in Scotland without a net loss of stores – with four closures being offset by an equal number of openings.
Business rates have also impacted the high street, with the most recent revaluation of how much each property is charged leading to calls for reform. This is now underway, with legislation making its way through the Scottish Parliament aimed at creating a rates system more supportive of business growth and long term investment in a changing marketplace.
Brexit uncertainty also continues to weigh on the fortunes of retailers. Earlier this year, PwC’s 2019 Retail Outlook revealed that the spending habits of a quarter of Scots (24%) were affected by Brexit in 2018, with a further 22% expecting to cut back this year.
Jason Higgs, Head of Business Recovery Services for PwC in Scotland said:
“Retail continues to be under immense pressure as it adapts to a new world where major chains generate an increasing proportion of their revenue from online sales at the expense of their bricks and mortar stores - which carry most of their costs. High streets are therefore in a period of realignment which is seeing leisure businesses move into spaces where retail has previously dominated.
“In the last six months the sectors growing their presence on the high street are the likes of convenience stores, coffee shops and fast food restaurants; we are even seeing an increase in the number of bars after a long period of difficulty for the licensed trade.
“Casual dining has been one of the hardest hit sectors as consumers watch their spending. Going out for dinner is one of the first luxuries to go, and that has been reflected in the number of large restaurant chains facing challenges.
“The increase in new openings in Scotland from 58 to 86 is welcome news and indicates that with more vacant premises than a year ago, there may be favourable deals out there for retailers looking to expand, though what is good news for operators is bad news for landlords who are increasingly seeing requests for rent reductions through CVAs.
“Undergoing such a huge change in the period of uncertainty since the Brexit vote more than three years ago has put all businesses beholden to high street spending under further pressure. With attention now turning to Black Friday and Christmas, retailers will be hoping for a strong trading season to ease them into 2020.”
The picture across Great Britain
Across Great Britain there were almost twice as many store closures (16 per day) as openings (nine per day). In total, 1,634 stores opened and 2,868 stores closed over the period, leading to a net decline of 1,234 stores. Over the same period last year there was a net loss of 1,123 stores.
Lisa Hooker, consumer markets leader at PwC, said:
“The record net decline in store numbers in the first half of 2019 shows that there’s been no let-up in the changing ways that people shop and the cost pressures affecting high street operators.
“While retailers need to keep investing to make sure their stores and propositions are relevant to today’s consumers, it’s also critical that all stakeholders find ways to ease the burden on operators, keep investing in the high street, and encourage new and different types of operators to fill vacant space.
“The good news is that there are green shoots, as new entrants are even entering embattled sectors such as fashion. Our research tells us that consumers still want to spend their money in well located and invested stores and leisure venues on the high street.
“However, as consumers continue to change the way they shop and spend their leisure time, the reality is that we may need fewer high streets in the future. This opens up opportunities to repurpose high street space for other uses, while the remaining space evolves to meet consumer demand for convenience, choice and experience.”
Notes to Editors
1. PwC and the LDC’s analysis tracked 66,352 outlets operated by multiple retailers in 500 town centres across Great Britain, between 1 January 2019 and 30 June 2019
2. Multiples are retailers that have more than 5 outlets nationally
3. The analysis is derived from The Local Data Company visiting the top 500 town centres. Each premise 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 we visited it. Internal shopping centre data is included where we have had co-operation from the landlord. The total number of multiples premises surveyed was 66,352.
4. The town centre is defined as per DCLG’s definition of the retail core. Scotland has no official retail core geography, so the geography taken is the postal town area where not specified otherwise. 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.
About the Local Data Company
LDC is the UK’s leading data creator using real people on the street to acquire the most up to date, on demand location and company specific data for the retail and leisure sectors. It combines powerful proprietary technology with a unique, field researched database of over half a million premises. LDC delivers primary evidence on thousands of companies and locations, including high streets, town centres, shopping centres, retail parks and standalone out of town stores.
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