Store closures: independents ‘facing downward spiral’

In the second half of last year more independent shops closed than opened – the figures dropping into negative territory for the first time since the same period in 2010.

Store closures: independents 'facing downward spiral'

While indies’ numbers nudged up over the year as a whole, during the last six months 7,743 shut up shop while just 7,704 opened, a decline of 0.03%.

However, according to a new report released by The Local Data Company covering the top 500 town centres, during the whole of 2012 independents continued the trend of opening three times more stores (15,932) than multiples, whose decline was little short of catastrophic.

During the year, the chains opened just 5,558 stores but closed 7,337, leaving an overall shutdown figure of 1,779 – up more than tenfold from the 174 in 2011. Twenty multiples closed each day, and LDC predicts that that will rise to 28 a day over the three months December 2012 to February 2013.

In percentage terms, numbers of multiples’ stores fell 2.7% in 2012 as a whole, while independents pushed their presence up by 0.55%. Independents now account for 69% of all retail and leisure units in Great Britain.

But LDC director Matthew Hopkinson describes the recent dip in independents’ numbers as “a major wake-up call for town centres. The fact that the second half of 2012 saw the first negative change since 2010 is of major concern,” he warns.

“With over 300,000 independents across Great Britain then a marginal turn for the worse can create a large number of additional vacant units in a very short space of time. With the independent average for town centres having risen to 69% the potential for further dramatic change to our high streets is enormous.

“The big question is whether this latest negative turn for the worse is the start of a downward spiral or merely a blip? The drawdown of the multiple anchors and the rising operating costs for these independents sadly suggests the former, as town centres compete as just one of many destination choices for the ever-demanding and technologically-savvy consumer.”

Meanwhile, he said the 7m sq ft lost by the chains last year was the equivalent of 131 football pitches, or over four Westfield Londons. And he added: “We can expect to see this trend continue and indeed accelerate in 2013, as more leases come up for renewal along with the ever-increasing demands from consumers for space that delivers an experience good enough to pull them away from their technology devices.

“The end of 2012 and the beginning of 2013 has seen the most dramatic period on record, as companies controlling more than 1,400 shops went into administration.”

LDC found that the most openings by independents last year were, in order of numbers: barbers; nail salons; convenience stores; beauty salons; charity shops; mobile phone shops; hairdressers; tattooing and piercing salons; takeaway food shops; and delicatessens.

Most independent closures (in order) were: women’s clothes shops; newsagents; recruitment agencies; mixed clothes shops; amusement arcades; florists; sports goods shops; men’s clothes shops; Chinese restaurants; and booksellers.

The most openings by multiples (in order) were: cheque cashing/payday loan stores; pound shops; pawnbrokers; charity shops; betting shops; supermarkets; and coffee shops.

The biggest losers for multiples (in order) were: card and poster shops; computer games shops; women’s clothes shops; recruitment agencies; general clothing shops; health food shops; and banks and financial institutions.

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