Store openings took a nose dive by 84 per cent year-on-year in the second quarter this year, as economic uncertainty due to Brexit drained appetite for bricks-and-mortar space.
According to the Local Data Company (LDC), the slowdown was led to a net loss of 207 shops in the quarter, compared to an increase of 1284 shops in the previous quarter.
LDC‘s Retail and Leisure Trends Report said the figures of the first two quarters marked the biggest drop between consecutive quarters in five years.
The report added that just under 3000 stores opened across the UK in the second quarter this year, but this is well below the 2012 quarterly average of 4006.
However, while the vacancy rate at the end of the quarter rose to 12.2 per cent, it was still below the 2012 peak of 14.6 per cent.
LDC director Matthew Hopkinson said Brexit’s impact was “clear”.
He said that the quarter’s net loss of stores from UK high streets was “a clear indicator of the uncertainty that permeates across all aspects of the UK economy”.
“Not only has the trend turned negative with more closures than openings, but the volume of activity has also dropped by 25 per cent,” he added.
“Whilst the numbers are currently relatively small to the total number of shops, the vacancy rate in Q2 started to rise and is likely to continue to do so if the current uncertainty continues.”
Hopkinson added: “The role of physical retailing continues to evolve and the place that a shop has in the overall buying cycle varies from brand to brand and sector to sector.
“Stores continue to perform a vital role in the purchase cycle and consumer journey, but the key questions remain around how many shops you need, what kind of format and in which locations.
“With rising costs everywhere for retailers, margins are being squeezed and therefore understanding these micro to macro location trends is fundamental for retailer success.”