Scottish high streets lose 148 stores in 2017 with no town immune

PCW

  • 142 store openings in 2017 offset by 290 closures across Scotland
  • 3303 stores were in business in Jan 2017 with 3155 in business 12 months later
  • Scottish net change of -4.48% highest in Britain, followed by North-East England with -4.31%
  • Across Britain, there was a net loss of 1,772 stores. Average net change of -2.57%

During 2017, 290 Scottish high street retail outlets closed their doors – a rate of over five stores a week, according to PwC research compiled by the Local Data company (LDC).

This rate was marginally offset by 142 openings, however it wasn’t enough to stem the tide with a net loss of 148 stores noted over the 12 month period. This is a 32% uplift from 2016 – 366 outlets closed and only 254 opened, resulting in a net loss of 112 stores.

Across Great Britain’s high streets, 5,855 outlets closed last year – a rate of 16 stores a day. This is a marginal increase on the 2016 picture where 15 stores closed every day (5,430 outlets), making it the second consecutive year the number of closures have risen.

Scotland

During 2017, no town was immune to the trend of high street loss, reflecting a tough trading environment including a slowdown in consumer spending and rising staff and business rates costs. Other challenges included a slowdown in food and beverage growth as consumer confidence reached a four year low in December 2017 (Source: GfK).

Some bright spots remain, however, such as the Co-op’s £160m expansion plan which could see up to 18 new stores opening in Scotland in 2018 and multi-million pound shopping centres due to launch in Glasgow and Edinburgh city centres by 2020.

In terms of category, the largest number of closures came from fashion shops, banks, convenience stores and travel agents. There was, however, some growth on the high street with cafes and tearooms and restaurants and bars among those showing the highest increase in net store numbers in 2017.

Lindsay Gardiner, regional chair for PwC in Scotland, said:

“2017 has proved to be one of the toughest trading periods Scottish retailers have experienced in years – borne out by a 32% rise in store closures with high street names such as Twenty One going into liquidation and others such as New Look and Prezzo closing outlets.

“And so far this year, there’s been little sign of this pressure letting up with the ‘beast from the East’ and ongoing cold snaps taking their toll alongside other adverse business factors.

“Online trading continues to be a significant factor in this shifting landscape – and not just in familiar areas such as fashion, food, books and music. Increasingly banks, travel companies and estate agents are feeling the digital pinch. However high street closures tend to be due to more complex structural and cost efficiency planning than the overall market environment, with consumers increasingly looking to interact with their service providers via apps or websites.

“Those retailers who can successfully keep pace with consumers by merging the experience of shopping online and in-store in a polished and smooth way, will see the rewards in their sales performance. For example, having a strong store presence for browsing and returns, and strong online for purchasing. Savvy retailers could also perhaps consider in-store Wi-Fi to allow customers to view product videos and research reviews.”

 

Scottish town Number of

stores Jan

2017

Number of

stores Jan

2018

2017 net change Openings closures
Aberdeen 479 463 (16) 24 40
Edinburgh (incl Leith) 1056 1027 (29) 44 73
Glasgow 930 87 (53) 41 94
Perth 165 152 (13) 4 17
Ayr 175 14 (11) 8 19
Dundee 239 225 (14) 12 26
Falkirk 136 129 (7) 5 12
Paisley 123 118 (5) 4 9
total 3303 3155 (148) 142 290

Kevin Reynard, office senior partner for PwC in Aberdeen said:

“Aberdeen and the North East is a vibrant place to live and work and our retailers play a significant role in our communities. However, it’s would be fair to say that the last few years have not been the easiest for them as well as other sectors in the North East. And UK-wide issues such as the dampening impact of Brexit-related uncertainty on business investment and the squeeze on consumers are certainly making themselves felt.

“While we’ve seen Oil and Gas firms working hard and innovating to ensure they are fitter for the future, it’s important that the region continues to broaden its economic reliance with other sectors such as food and drink and life sciences growing and taking some of the strain.

“With household names from All Bar One to ice cream manufacturer, Mackies, confirming moves into the multi-million pound Marischal Square development, here’s hoping that Aberdeens retail prospects are turning a corner in 2018.”

Commenting on the trend across Dundee and Perth,  Susannah Simpson, PwC private business partner, said:

“While there is no escaping the fact that it has been a tough year for both cities, there is still a lot to be positive about.

“Dundee waterside continues to be a hive of activity with passing shoppers sure to be impressed by the emerging V&A building and the extensive train station development which will incorporate cafe facilities and a new Sleeperz hotel, alongside plans for further hotel, office, residential and retail outlets in site six, north of the V&A.

“And Perth is by no means the poor cousin. Exciting plans to create a new leisure hub at Mill Quarter in the heart of the city with a mix of bars, restaurants, shops and a cinema will bring a welcome economic boost and hopefully encourage further investment across the region in 2018 and beyond.

“It is the optimism sparked by these types of wider developments which can cement the demand for bricks and mortar retail outlets in addition to the move to digital offerings.”

The analysis of the top 500 town centres in Great Britain included 67,157 outlets run by retailers with more than five outlets across the country. It found that overall volumes of activity (openings + closures) have plummeted from a record 13,109 in 2012 to 9,938 in 2017 (-24%), although 2017 activity was up slightly compared to 2016 when 9,964 outlets opened or closed.

Lucy Stainton, Senior Relationship Manager (Retail), The Local Data Company, said:

“There is of course no doubting that we are experiencing a period of great change in retail, and the question around the relevance and role of stores is still very much on the industry agenda. LDC’s latest figures show that there continues to be a vast amount of churn across the physical landscape and, whilst the gap between openings and closures has widened slightly in 2017, we are seeing certain sub-sectors really gain traction.

“It is this ‘re-occupancy’ and evolution of the use of space which is most striking, as banks become coffee shops, pubs change to nurseries and nail salons open in the space vacated by fashion shops. In 2017, the sub-sectors with the highest growth rates largely have ‘experience’ in common, as consumers are still very social and want to engage with their high streets and physical space in a way which perhaps replaces traditional shopping activities, some of which has moved online. Likewise, these corners of the retail landscape play well for consumers looking for more affordable luxuries as consumer uncertainty persists and spending remains of a cautious nature.

“It is also interesting to note that despite the onslaught of digital and audiobooks, readily available via the likes of Amazon and Apple, booksellers are on the list of 2017 ‘risers’. Perhaps unexpected but then again does this suggest there is hope for more traditional retailing of physical products, if done well.

“For 2018 we predict there will be continued green shoots of growth across almost all sub-sectors, visible beneath the headline trends, as newer entrants and younger brands take this ‘shake out’ as an opportunity to pick up available property. Businesses with a relevant proposition and a strong understanding of their customer can absolutely still thrive in the right locations. Equally more established brands who continue to tweak their offer and innovate on the way through will no doubt see positive results and retain their valued place on our high streets.”

Table 2. Top risers and fallers by business type in Scotland 2017
Risers Net Change Fallers Net Change
Chinese fast food takeaway 50% Clothes shops – women 25.5%
Cafe/ tearooms 28.6% Travel agencies 17.2%
Restaurants and bars 8% Banks/financial institutions 14.4%
Recruitment agencies 5.1 Shoe shops 8.5%
Restaurant  (Italian) 4.4% Mobile phone shops 8%
Sports goods shops 4.4% Convenience stores 7.5%
Coffee shops 2.9% Fashion shops (general) 7.3%
Source: Local Data Company (risers rated on highest level  of openings/fallers by highest level of closures)
Table 3. Openings and closures of multiple retailers by region across the top 500 GB town centres in 2017  (Source: Local Data Company)
Country/English region Number of store openings Number of store closures 2017 net change
East Midlands 271 399 -128
East Of England 297 481 -184
Greater London 1,118 1,454 -336
North East 116 216 -100
North West 340 515 -175
Scotland 142 290 -148
South East 713 898 -185
South West 359 511 -152
Wales 104 157 -53
West Midlands 338 482 -144
Yorkshire and the Humber 285 452 -167
Total 4,083 5,855 -1772