Chain stores close at one a day in North East amid retail decline

Major chain stores shut shops in the North East at a rate of one a day in the first half of the year, new figures show.

The figures showing the continuing decline on the region’s high streets come from a survey conducted for accountancy firm PwC by the Local Data Company.

There was some positive news for the region, as the rate of closures slowed from this time, while the North East’s rate of closure was also below the national average.

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According to the survey, 326 chain stores closed in the first half of the year while 140 opened, leaving the region with 186 fewer shops. That was a closure rate of 2.2%, below the national rate of 2.5%.

PwC said Government pandemic supports such as the extended furlough scheme, business rates relief and Government-underwritten loans had played major roles in helping operators stay afloat, along with the impact of the rent moratorium.

But the firm warned the second half of this year will be “make or break” for many outlets as Government assistance is wound down.

Joel Smith, PwC partner and consumer markets lead for the North, said: “After an acceleration in store closures last year coupled with last minute Christmas tier restrictions and lockdowns extending into 2021, we might have expected a higher number of store closures this year across the North.

“Government support has proved to be the lifeline for many to weather the storm and survive the pandemic. The fate of many operators has also been helped by resilience in consumer spending, including investment in the home through lockdown and using enforced lockdowns savings for ‘revenge spending’ when possible.

“However, operators are far from out of the woods and the next six months will be a make or break for many chains, particularly with the reinstatement of full business rates for all but the smallest operators, the winding-down of furlough support and agreement yet to be reached between many operators and landlords on rent arrears.

“There is also continued uncertainty for hospitality businesses who will be apprehensive of further restrictions on operating and the possible requirement for vaccine passports later in the year.

“But the good news is that there are some green shoots of optimism. Consumers still want a physical shopping experience and a number of chain stores and restaurants are opening across the regions.”

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The study surveyed more than 200,000 outlets operated by businesses with more than five branches across Britain, including retail, restaurants, banks, cafes and gyms.

Nationally, fashion retailers were worst affected, with 1,063 stores closing in the first half of the year, ahead of charity shops with 452 closures, car and motorbike outlets (428) and betting shops (337).

City centres were hit the most severely as people and businesses moved more to suburban or out-of-town locations, reflecting the rise in working from home. City centres suffered a 4.3% drop in their number of retail outlets, compared with a 3% decrease for commuter towns and a 2.3% decline in villages.

Paddy Lillis, general secretary of the Union of Shop, Distributive and Allied Workers (Usdaw), said there was ‘little comfort’ in this year’s figures being slightly better than 2020’s.

He added: “The coronavirus pandemic has pushed many retailers and retail workers to breaking point, so we need Government measures to be equally significant.

“Retailers need urgent measures to deal with the immediate crisis and a longer term strategy to deal with some of the more fundamental structural issues facing the industry. Usdaw is calling for the Government to adopt an urgent recovery plan for the retail sector.”

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