The UK is currently grappling with a retail crisis of unprecedented proportions, with the closure of stores hitting a new record high in the first half of 2020. Data from the Local Data Company and PwC UK reveals that the impact of Covid-19 on consumer behavior has been profound, leading to over twice as many net closures compared to the previous year. This seismic shift in shopping habits has forced retailers to quickly adapt to the new normal.
In the first six months of the year, a staggering 11,120 chain operator outlets closed their doors, outnumbering the meager 5,119 new shop openings, resulting in a net decline of 6,001. This decline is almost double that of last year, underscoring the immense challenges faced by the retail sector. However, there are bright spots amidst the gloom; value retailers and discount supermarkets have displayed greater resilience in meeting consumer demands for affordability, while leisure businesses like takeaways and pizza delivery shops continue to thrive.
One silver lining highlighted in the report is the renewed interest in local high streets, driven by the practicalities of lockdown and the surge in remote working. Retailers now have a unique opportunity to innovate and transform, capitalizing on the availability of prime properties, evolving consumer behaviors, and increased consumer spending. By embracing an adaptive approach, retailers stand a better chance of weathering the storm and emerging stronger on the other side.
Lucy Stainton, head of retail and strategic partnerships at the Local Data Company, stresses the uphill battle that retailers are facing, with 22% of the multiple market still temporarily closed. The looming impact of local lockdowns and restrictions, such as the 10 pm curfew, is expected to lead to further closures in the coming months. However, there is optimism for a fresh vision for high streets, with an emphasis on creating vibrant community spaces that go beyond traditional retail.
Lisa Hooker, consumer markets leader at PwC, underscores how the pandemic has accelerated the transformation of shopping behaviors and the urgent need for innovation within the retail sector. The days of the traditional high street are numbered, and recovery cannot be solely reliant on retail. Collaboration between businesses, communities, and government at all levels is essential for shaping dynamic and prosperous high streets. In essence, the key to survival lies in adaptability and a comprehensive approach to revitalizing the retail landscape.
For related information on strategies for retail survival during the Covid-19 pandemic and tips on reviving high streets, please visit Retail Gazette and Retail Week.
