Yorkshire & Humber high streets continue to struggle in testing retail climate but gap between closures and openings reducing year on year

store openings
  • Half-year net decline in stores see 1,234 British shops depart the high street, the highest level since the start of the analysis in 2010
  • Yorkshire & Humber high streets saw net loss of 89 stores in first half of 2019 compared to 117 for the same period in 2018
  • In total, an average of 16 stores a day closed, as restructurings and the online migration of shopping and services continue to hit the high street
  • However, store openings rose by c.4% highlighting the potential opportunities for new entrants as well as established retail and leisure brands

Continued growth in online shopping, shift to in-home leisure and heightened restructuring activity has seen the half-year net reduction in stores on Britain’s high streets remain at record levels, according to research compiled for PwC by the Local Data Company (LDC).

The PwC/LDC analysis across multiple retailers in the top 500 town centres across Great Britain covered 67,586 outlets run by retailers operating more than five outlets across the country, found that in the first half of 2019, 152 shops opened and 241 closed across Yorkshire & Humber, representing a   -89 outlet net reduction across the region. An improvement in the net fall compared to the same period last year which saw a net reduction of -117 stores.

Only three town centres across Yorkshire & Humber saw a positive net change in the first half of the year – Grimsby, Pontefract and Beverley with Pocklington and Goole experiencing no net change. Those towns across Yorkshire & Humber with the highest net reduction in H1 2019 were; Leeds, York, Sheffield, Doncaster, Scunthorpe and Bradford (see Table 1).

The research also revealed that across multiple retailers in the 25 town centres analysed across the Yorkshire & Humber men’s clothes shops, public houses/bars, estate agent’s butchers and bakers experienced the highest net fall in the number of outlets.

Table 1: Yorkshire & Humber towns with the highest net reduction in H1 2019.

Town centre

Businesses Jan 2019

Businesses July 2019

Percentage Fall

Net Change

Openings

Closures

Scunthorpe

132

126

4.5%

-6

5

11

Bradford

239

230

3.7%

-9

13

22

Doncaster

257

248

3.5%

-9

20

29

Sheffield

343

332

3.2%

-11

8

19

York

411

400

2.6%

-11

8

19

Leeds

741

730

1.4%

-11

34

45

(Source: Local Data Company)

Joel Smith, PwC’s Retail Lead for Yorkshire & Humber, said:

“The positive for the region is that year on year the net fall in stores has slowed, however quite simply openings across the region aren’t replacing closures at a fast-enough rate with some of our towns experiencing no new openings – that said Yorkshire & Humber was one of only four regions to experience a slowdown in net figures year on year.

“The reality for many of us is that we now prefer to shop online and increasingly eat, drink and entertain at home. As a result the high street is having to adapt to an overcapacity in retail and leisure space resulting from these channel shifts.

“The key for retailers and leisure operators across Yorkshire & Humber is to continue looking at their businesses - including their store portfolios - to make sure they have a strong brand and product offering. We continue to see the winners flourishing because they serve the needs of the customer by offering things that only a physical store can achieve underpinned by a clear proposition.”

Across Great Britain

A record net 1,234 stores disappeared from Great Britain’s top 500 high streets in H1 2019. In total, 1,634 shops opened, compared to 2,868 closures. The shortfall between openings and closures is the highest level since the LDC analysis began, as withdrawals from the high street and retailers restructuring their portfolios continued a-pace into the first six months of 2019.

Figure 1. Opening and closures of multiple retailer units, H1 2013 - H1 2019  

 

LDC Graph 1

On a sector by sector basis, only 15 out of 96 sectors showed a net growth in store numbers, and all but two grew by only a single digit number of outlets: takeaways with a net increase of 26 outlets, and sport and health clubs with a net increase of 17. Meanwhile, the biggest net declines were seen amongst fashion retailers (-118), restaurants (-103), estate agents (-100) and pubs (-96). Categories traditionally amongst the risers in previous years, such as coffee shops, food to go, jewellers and beauty shops, have all seen slower growth rates or even decline in H1 2019 as overcapacity and economic conditions took their toll. (see figures 2 & 3).

Figure 2. Top 10 categories for store closures, H1 2019

LDC Graph 3

There was a slight increase in store openings in the first half of 2019 compared with last year (from 1,569 in 2018 to 1,634 in 2019), potentially indicating some renewed optimism amongst high street operators. Interestingly, seven of the top ten sectors for store openings also featured amongst the top ten sectors for closures, such as fashion.

Figure 3. Top 10 categories for store openings, H1 2019

 

LDC Graph 3

Fashion retail continues to be the hardest hit sector, with 10 stores a week closing, mainly as a result of high profile administrations, alongside CVAs and restructurings -particularly amongst major mid-market chains.
While the decline in many service sectors are likely to continue, the fact that fashion and restaurant closures have been dominated by one-off administrations and CVAs, suggests that this decline may ease in the coming year.

Zelf Hussain, retail restructuring partner at PwC, said:

“A number of high-profile business administrations have contributed to the record net decline in high street store numbers, for example in fashion retail and casual dining. Several of these were in turn caused by a culmination of CVAs that reduced rents and store numbers but did not sufficiently improve the consumer proposition or cost structure of those brands.

“This reinforces our view that any business restructuring needs to happen alongside a wider programme of change. As we approach the key revenue period in the run up to the festive season- often make or break for many retailers - right-sizing store portfolios and wider cost bases will be crucial.

“But the PwC and LDC research also shows that successful operators are taking advantage of the current turmoil to either open stores that were not economically feasible in the past, or to move stores to better locations or to take advantage of lower rents. And it’s this nimbleness that will set apart winning retailers in years to come.”

Across the regions and nations...

Figure 4. Openings and closures of multiple retailers by region across the top 500 GB town centres in H1 2019

 

LDC Graph 4

Greater London saw the largest number of net closures across all the regions, although it was right at the national average (-1.8%) when taking into account its overall larger number of units.

The East Midlands, North East, South East and Yorkshire and the Humber were the only regions to see a reduction in their net closures between H1 2018 and H1 2019.

Lucy Stainton, Head of Retail and Strategic Partnerships at The Local Data Company, said:

“One of the most striking things about this latest Local Data Company and PWC analysis is the level of market churn identified in such a short space of time. Whilst the overall net change number, a loss of 1,234 occupied units in only six months, is certainly significant, the level of openings and closures activity beneath this is hugely notable as the industry continues to re-set.

In our experience, retailers are being that much more cautious and risk averse as far as both planning for new store openings and in making decisions across their existing property portfolios.

The reality is that UK retail space will continue to look very different over the coming years, and this is demonstrated by the sheer number of stores opening and closing on an ongoing basis.”

 

 

Joel Smith

Joel Smith, PwC Yorkshire & Humber Retail Lead  

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