Chain store closures soar nearly 80% in 2019

Store closures

Some 16,073 shops – about 61 every working day – pulled down their shutters for the final time during 2019, as store closures leapt, new research has found.

During 2019, large retailers with 10 or more stores closed 5,901 shops, a leap of 79% on the 3,303 stores that they closed in 2018, according to the Centre for Retail Research’s “retail in crisis” end-of-year report.

Independent retailers, while still closing 10,172 stores, fared slightly better, with closures down nearly 10% compared with the 11,280 shops they closed in 2018.

Overall the total number of shops closures rose by 1,490 during 2019, up from the 14,583 shops closed in 2018.

Professor Joshua Bamfield, director at the Centre for Retail Research, anticipates another tough year ahead for high streets, forecasting that store closures will rise by about 9% to 17,565 during 2020.

He said: “The commercial pressures of higher labour costs, business rates and relatively weak demand will continue to undercut profits and force the weakest companies to close stores or enter administration.

“The high street and suburbs will continue to decline.”

In the fashion sector names such as Debenhams, Select, Karen Millen, LK Bennett and Jack Wills all went through administrations in 2019 with more, such as Sir Philip Green’s Arcadia group, using CVAs to restructure their businesses.

Prof Bamfield added: “In 2020 further announcements from companies that have already gone through CVAs or administration may well result in cutbacks on their existing operations.”

The Government will extend the retail discount on business rates to 50% next year in England, up from 33% during 2019/20, to try to stem closures while committing to launching a fundamental review of the tax.

Robert Hayton, head of UK business rates at the real estate adviser Altus Group, said: “Whilst just 10% of retail properties in England are over £51,000 in rateable value, and precluded from the discount, they still pick up 69% of the business rates burden for the entire retail sector.”