The UK is witnessing the sharpest rate of shop closures over four years. The first half of 2016 saw 2,656 outlets being shut on UK's high streets, which translates to about 15 shop closures per day, a report by PwC and Local Data Company has revealed.
The report, which highlighted the pressure facing the retail sector, said the situation was worsened with new store openings falling to its lowest levels since 2011. It said the period saw only 2,153 new shops across the high streets, meaning a net decline of 503 shops.
One of the highlights of the report was that while fashion retailers were declining, there was an increase in tobacconists, estate agents and jewellers. While 206 fashion retailers shut shop in the first half of 2016, only 119 new such shops opened, it said, indicating a net decline of 87 fashion shops in the period.
However, on the other hand, according to the report, while 32 tobacco shops closed in the period, 60 new shops opened, indicating a net increase of 28 tobacconists. With regards to estate agents, there were 26 net additions in the period, while jewellery shops saw a net increase of 26 new shops.
This report follows the recent collapse of BHS, a British department store chain whose branches were mainly located in the UK high streets or shopping centres. The 88-year-old company entered liquidation in April leading to the closure of all of its 164 stores.
More recently, American clothing and accessories retailer GAP, decided to pull out its Banana Republic brand out of the UK. GAP has eight shops under this brand in the UK, all of which are set to close soon. The current report also follows a recent warning by Kantar Worldpanel. The consumer research firm had said that fashion sales in the UK were declining at the steepest rate since the 2008 financial crisis.
Retail analyst Richard Hyman said the worst was not yet over for the UK retail sector. He was cited by the Guardian as saying, "This is the toughest retail market we have ever seen by some distance…But we have seen nothing yet; next year will be worse. I have been going on about this for ages, but there is oversupply. There are too many shops and online shops. 'Build it and they will come' might be true in Field of Dreams, but in business you can't carry on doing that. We have got the most promotional market that anyone has ever seen."