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High street shop closures at five year low

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14 UK high street stores closed a day in 2015 but this is the slowest rate of closure in five years, new research has shown.

According to figures from PwC and the Local Data Company, around 5,138 stores shut up shop in town centres last year, compared with 5,839 in 2014.

Clothing chains, convenience stores and mobile phone shops were particularly affected, not least the demise of Phones 4U.

This was tempered by 4,640 new openings last year, taking the net number of store losses to 498 compared with 987 in 2014.

This is a clear improvement on 2012, when 20 stores were closing on average each day. This could symbolise that retailers are adapting to shifting consumer patterns quicker.

“The lower rate of closures in 2015 reflects optimism amongst retailers and indeed most consumer confidence indices support this," said Mike Jervis, Insolvency Partner and Head of Deals Retail Specialist at PwC. "In addition, retail insolvencies are at an historical low.”

Coffee shops led the growth in new store openings last year, for example Costa which is planning to open an extra 500 stores in Britain by 2020. In total, the number of coffee shops increased by 4% – or 80 units last year.

More jewellery shops, takeaway food branches and tobacconists also populated the high street last year.

“The openings are concentrated on experience type outlets, especially food and beverage and I’d also expect to see more growth in discount store openings this year," added Jervis. "The closures reflect ongoing structured changes in retail banking and the higher regulatory hurdles facing so called money shops,” Jervis said.

He also said that anecdotal evidence indicates how retailers choosing not to renew their leases were also adding to store closures. The trend will likely continue as more leases expire.

Published on Monday 14 March by Veebs Sabharwal

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