Data from LDC that looks at 2015 and also the last six years shows who, what, how many and where independent and multiple retail and leisure businesses have opened and closed.
You can download the Retail Market Trends Report Summary here
If you look at the numbers they are not insubstantial with nearly 100,000 businesses either opening or closing every year. This is approximately 20% of the total stock of over half a million premises.
Nearly 100,000 businesses either open or close every year
The headline numbers are:
- Chain (Multiple) retailers continue to consolidate through store closures and their destination of choice is retail parks and large shopping centres.
- In 2015 there was an overall loss of 1,147 chain stores with the North West and London seeing the greatest number of these closures.
- Independents, which account for 65% of all units, continued to grow albeit at their lowest rate for some time with a net increase of just 476 units from openings and closures of 68,100 businesses.
History tells us that independents have the propensity to go from a high number of net openings and a high number of net closures.
Analysis by location type of these openings and closures reveals that High Streets saw a net loss of 450 businesses whilst Retail parks saw a net increase of 501 with Shopping Centres nearly half that rate of increase at 270 new businesses. Stand-alone locations saw the greatest drop with a loss of 992 trading units.
The final question is then what kind of businesses are closing and opening?
Comparison goods (shoes, clothes, books, florists, jewellers etc.) have continued to close more shops than they open. Analysis of the changes from 2012 show over a 7% net loss in these businesses which equates to over 5,000 stores which is the equivalent of nearly seven Exeters!
These numbers would be far higher if it was not for expansive retailers such as Poundland, 99p Stores, Card Factory and B&M Bargains who sit in this category.
Convenience retail, which is where the supermarkets, food shops and convenience stores continues to grow and be more significant in the overall shopper psyche, as they seek more for less but also more convenience at the same time. Whilst supermarkets and convenience stores sit in the same classification they are very different business models, which Morrisons found out to its cost with M Local.
Understanding and ongoing monitoring of locations, the catchment and the competition is key to success.
Service retail has seen a big increase with barbers, hairdressers, nail salons, tattoo parlours and letting agents all filling shops whilst banks, travel agents and insurance brokers all exit as a result of online ‘better value’ alternatives.
The final sector is Leisure, which includes food & beverage outlets, entertainment and accommodation. Eating out has grown significantly over the last few years with a net increase of 3,210 new outlets in 2015 alone.
This growth has come from restaurants such as Carluccios, Wagamamas, Byron, Bills and Nandos to take away/eat in operators such as ITSU, Pret, Wasabi, Ed’s Diner and Five Guys to name but a very few.
Conversely there has been a reduction in the number of Indian and Chinese restaurants but we have also seen a more global offer as seen by Turtle Bay (Caribbean) as well as the arrival of our first Afghan restaurants.
All of these changes are resulting in an evolving and changed high street from the one we knew five years ago, let alone 25 years ago for those of us old enough to remember.
- Is it all because we have a larger and more ethnically diverse population?
- Is it because of the Internet?
- Is it because more people live out of towns and more retailers are based out of towns than ever before?
- Is it the rise of the supermarkets?
- Or is it the more significant underlying change that technology is bringing to the way people eat, drink, think, work, sleep and shop?
All of these questions should make us go back to basics and ask the question WHY?
- Why do I exist as a shop?
- Why would people want to pay me for goods or services?
- Why do I do what I do?
From this you can get into the WHAT, WHERE and HOW but that is for another day.
One aspect that does not cover any of the above is the generational shift in what people want to do and will do.
A good example of this is the vast number of corner shops, jewellers and restaurants that were established off the back of the British Empire and the post war and post colonialism years. Through hard work, dedication and perseverance many made a great success and living, from setting up shop in the UK and some even went on to found great multiple chain stores.
But there are two numbers that come through the openings and closures analysis and that is the decline of Indian restaurants and newsagents/corner shops.
MemSaab, Nottingham (Source: LDC)
In 2015 150 Indian restaurants were lost from the high street and 180 newsagents. What has caused this? Has the UK fallen out of love with the corner shop and local Indian restaurant? NO would be my answer and one that is based on speaking to a number of owners/operators of these establishments.
One of the main reasons is that the second and third generations of the founders no longer want to work long hours and serve customers for minimal reward. They have gone off and got a good education, in many instances encouraged by their parents, and are now professionals who can work more sociable hours for greater reward and for minimal uncertainty.
This is what is driving many closures. As this continues, will we see the death of certain high street businesses that we took for granted for many years and mourn their passing?
As the saying goes ‘only two things in life are certain – death and taxes’ so how do we make sure the births outpace the deaths?
What are your thoughts on the above numbers and what could be done to encourage the success of independent retailers?