One Fifth of High Street Stores to Disappear By 2018
The latest prediction from retail analysts indicates that as many as a fifth of Britain’s high street stores could fail in the next five years…
The Centre for Retail Research has published its analysis on the possible look of the high street in five years’ time and the outlook is not good.
In its report, Retail Futures 2018, the Centre for Retail Research predicts that there will be a fall in the number of total store numbers – down from 281,930 today to 220,000 in 2018 – that’s a drop of 22%.
Losing over 60,000 stores in that time period will also result in job losses, totalling around 316,000 according to the independent research group.
Of the 60,000 or so stores expected to close, some 22,600 are predicted to be in major or medium-sized companies with 140,000 job losses in 164 businesses.
The larger retail businesses that do struggle will probably survive but at the cost of having to close over half of their stores.
Looming Retail Crisis
One of the key causes for what the Centre for Retail Research calls a "looming retail crisis" is the widening gap between consumer spending and retail costs.
Since 2006 consumer spending has grown by 12% but has been outpaced by retail operating costs and business rates which have risen by 20% over the same period.
Online retail is still being touted as another reason why the high street is expected to decline: Currently online shopping accounts for 12.7% of all retail sales in the UK. In 2018 that figure is expected to increase to 21.5%
It has also been calculated that high street retailers with a strong online presence require fewer "bricks & mortar" stores than they once did: In the mid 2000s big retailers might have had 250 stores whereas now they need just 70 to create a "national presence".
All of this is predicted to come about despite the efforts of the government and the Mary Portas Review.
Store closures are also expected to have a regional variation with closures being more widespread in disadvantaged areas whilst tourist destinations and affluent areas will fare better.
Shopping near low-income areas will be at most risk as will secondary and tertiary shopping areas. Wales, the north west of England, Yorkshire & Humberside and the North east of england are all expected to lose the biggest proportion of their shops.
London, the South East of England, Birmingham, Manchester, Glasgow, Oxford and Brighton are expected to do well by comparison.
The knock-on effect will not just be the loss of jobs but also to the pension funds whose investments are tied-up in commercial property rents.
Retail In 2018: Shop Numbers, Online And The High Street is a large report so interested parties can email firstname.lastname@example.org to enquire about copies.