Retail Apocalyse Opens Up Opportunities to Reinvent High Street
The retail apocalypse is spreading beyond North America, forcing retailers around the world to examine closely their portfolio of stores and, if necessary, close the least efficient.
In the UK, for example, the net reduction in stores on UK high streets hit record levels in the first half of this year, according to research by the Local Data Company (LDC) and PwC.
Store closures are running at 16 a day, compared to nine store openings a day. In total, 1,634 stores opened and 2,868 stores closed over the period, leading to a net decline of 1,234 stores, a rise of 10% on the year-earlier period.
According to PwC, the record net decline in store numbers in the first half of 2019 is due to the changing ways that people shop and the cost pressures affecting retailers.
Fashion retail continues to be the hardest hit sector in the embattled UK high street, with 262 stores closing in the first half of this year . _The figures are distorted by the difficulties of some high-profile mid-market UK fashion chains, which had to close stores and/or filing for administration – a type of bankruptcy protection.
Interestingly, fashion retail also leads in the number of store openings, with 144 new fashion stores opening in the period, confirming the dynamism of this sector. But overall there was a net decline in fashion retail stores of 118 stores.
Other sectors showing big net declines were restaurants (-103), estate agents (-100) and pubs (-96). Only 15 out of 96 retail sectors showed a net increase in stores, and the biggest two were services, takeaway food, with a net increase of 26 outlets, and sport and health clubs, for which the increase was 17.
But PwC prefers to put a positive spin on the findings of the study. Lisa Hooker, consumer markets leader at PwC, says:
“The good news is that there are green shoots, as new entrants are entering even 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, she cautions that as consumer shopping habits change, the traditional role of the high street as a shopping destination will inevitably diminish. She says:
“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.”
Find out how retailers are reinventing the high street around customer experiences by reading our blog post, Renaissance of High Street Puts Focus on Customer Experience.