Multichannel shopping is “severely impacting profitability” as store openings reach 5 year low

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New data released today has shown that the UK opened the least amount of new retail stores in five years for the first half of 2016, and shut 15 shops a day on average.

The Local Data Company’s (LDC) new research found that just 2153 shops were opened in the first six months of this year, only slightly higher than 2011’s 1809.

Conversely, 2656 stores closed their shutters during the same period, meaning that overall 503 stores were lost across the UK, the highest decline since 2012 when 953 shut.

Worst hit was the fashion sector losing 87 stores, opening 119 but closing 206. 

Sectors that boomed in the same period were jewelers, tobacconists and health clubs, along with restaurants and takeaway food stores.

Shopping centres were the areas worst hit, suffering a one per cent loss compare to the 2015, retail parks however were the online location to see growth in retail occupiers in the first half of the year.

READ MORE: Retail footfall drops across the board with shopping centres hit hardest

According to LDC the overall number of store openings and closures had sharply declined from 2010’s 7749, to just 4809 in the six months till June this year. 

This was attributed to a rise in online shopping which encourages an “overhaul in retail store strategies”.

Most significant was the rise in multichannel shopping, leading to 22,00 click-and-collect points being established throughout the UK. Carphone Warehouse grew the most, creating 129 click and collect points in 2016.

“We are seeing far fewer closures due to outright insolvencies, but more due to lower key restructuring of store portfolios,” PwC insolvency partner Mike Jervis said.

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“This is still having a negative impact particularly on the high street – interestingly, units on retail parks are far easier to find alternative tenants for.”

LDC director Matthew Hopkinson added: “Chains are having to work harder than ever to guarantee store location, format and experience along with a strong web presence, social presence and logistical operation that delivers to consumers’ ever increasing demands of ‘now’. 

“This is severely impacting profitability and hastens store closures”

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