What’s happening on Britain’s high streets?
Rising interest rates, soaring costs for consumers and businesses and fears of a recession – it’s a jungle out there for people who are trying to make ends meet.
Nowhere does that have a more visible and direct impact than on the high street, and new research by the Local Data Company for PwC shows a mixed picture.
For instance, 11,530 chain outlets closed in high streets, shopping centres and retail parks in 2022. That works out to 32 closures a day.
However, this looks a lot better when you consider that this is the smallest number of closures seen in eight years, and during the pandemic, the number of closures was around 50 a day.
It’s a similarly mixed picture when it comes to chain outlet openings. There were 7,903 store openings during 2022 – which works out to 22 per day. But the number of openings is still lower than it was pre-pandemic.
Upon drilling down into the figures a bit further, it was clear that banks saw the most closures, with one in eight shutting up shop every year. Conversely, takeaways, convenience stores and amusement arcades performed best.
So while the high street remains an important location for both work and play, the number of closures is still higher than the number of openings, and people are turning to the high street for different reasons than they used to.
At the same time, Britain’s high streets are facing tough competition from retail parks, which generally performed stronger in 2022, partly thanks to the fact that they offer relatively easy car access, parking spaces and a good mix of retail tenants.
The high street is also, undoubtedly, being hit by the ongoing cost of living crisis, as double-digit inflation means consumers’ spending power is weaker and they are having to prioritise and make difficult choices about what to do with their money.
And, of course, people’s working habits have changed drastically in recent years, with record numbers choosing to work from home for at least several days a week.
As the PwC report notes: “With hybrid working now fully ingrained in society combined with a shift to larger retail park stores, the high street has work to do to address a footfall that is unlikely to recover much more.”
Shop vacancy rates are often a good measure of the health of the economy, as they reflect both consumer and business confidence in many ways. So it’s good to see that the number of closures fell and more shops opened in 2022.
But although inflation is starting to gradually ease, it remains uncomfortably high, which will pile considerable pressure on household budgets and retailers’ margins over the coming months.
We can only hope that if inflation is considerably lower in the second half of the year, as some analysts are forecasting, businesses will be in a more robust position to invest and people will be happier spending on both luxuries and essentials.