Store closures drop to lowest rate in seven years
However, openings have yet to recover to pre-pandemic highs, which PwC said suggests that retailers are exercising strict caution in the current trading environment.
Store closures have stabilised to the lowest rate in over seven years, with 6,146 store closures in H1 2022 (-30%) year-on-year from multiple retail operators, compared to 3,888 openings (+11%).
According to PwC’s latest Store Openings and Closures report for H1 2022, there were 34 closures, 21 openings, and a net closure of 12 stores per day during the first six months of 2022.
However, openings have yet to recover to pre-pandemic highs, which PwC said suggests that retailers are exercising strict caution in the current trading environment.
The spread of closures between regions are also at their lowest for over seven years, with the East of England and the West Midlands at -1.4% compared to the North East and South East at 0.8%.
Meanwhile, London saw -3.3% net closures in H1 2020 and -2.9% in H1 2021, and has now seen net closures improve to -1.3% this year, as the trend to working from home has stabilised.
Recovery was driven by leisure categories, helped by the release of post-pandemic pent-up demand.
Takeaways have been boosted by the growth of home delivery, which has made stores “more viable”, while new restaurant chains have expanded “quickly” into empty spaces and taken advantage of lower rents and pent-up demand post-lockdown.
Additionally, amusement arcades have taken advantage of vacant units and lower rents to open particularly in suburban areas and seaside towns, while DIY shops, including trade counters, have taken advantage of home improvement trends formed during lockdowns.
Lisa Hooker, industry leader for consumer markets at PwC UK, said: “A reduction in closures and growth in openings give some reason for optimism, but any positivity must also be viewed alongside the significant concerns over the rising cost of living and how it will impact people’s ability to spend.
“While the outlook is better than it was during the height of the pandemic, it’s worth noting that the numbers still show a decline, with our net numbers equating to 12 closures a day in the first half of this year. Added to that, retail footfall remains 10-15% below pre-pandemic levels and openings lack momentum – particularly outside leisure.”
