Recent retail data has pointed to a pick-up in sales activity over the past two months, but according to a report published by the British Independent Retailers Association (Bira) today, the high street growth drive has screeched to a halt.
Research conducted by Bira in conjunction with the Local Data Company (LDC) suggests shops, big and small, are shutting down once more. It said that in the first half of 2015 more closed than opened for the first time in the past five years.
Since 2010 the net number of independents has grown, adding more than 7,000 extra shops to the high street and providing the only significant driver of reduction in the vacancy rate of shops.
However, Bira says the situation has now gone full circle and the high street has “run out of road”.
The number of openings of independents has remained fairly consistent since the crash, at about 15,000 a year in its sample, indicating about 30,000 in the wider economy. But closures have been accelerating, and this year they have caught up with and overtaken openings.
Every region in the country has seen a fall in numbers in the first half of this year, with the exception of the North East, which recorded a tiny net gain of shops. Independents as a whole fell nationally by 144 but in the first six months of 2014 they rose by 289. This sounds small in a sample of 104,715, but disastrous in comparison to a gain of over 3,600 in 2011.
Bira painted a gloomy picture of the challenges retailers face: “Prices in shops have been falling for more than two years, faster than inflation measures such as CPI. The costs of employing people and occupying property continue to rise ahead of inflation. Six out of 10 shop leases are due for renewal, or not, by 2017 and the end of a lease is the most frequent cause of the closure of a shop.”
The organisation has called on the Chancellor to reform business rates when he makes his Autumn Statement on November 25, arguing that the trend towards shop closures will accelerate if no changes are made.
“If he does not renew the £1,500 discount for small retail and leisure businesses, small business rate relief and the small business multiplier for next year then he could trigger a crisis that will drive the high street back to the bad old days of five years ago,” it warned.