Why Nearly 5,000 UK chain stores closed last year at rate of 14 a day

Why Nearly 5,000 UK chain stores closed last year at rate of 14 a day
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Last year, the UK witnessed the closure of nearly 5,000 chain stores, equating to about 14 closures per day. This decline was significantly impacted by the collapse of Wilko and the withdrawal of banks and pubs from town and city centers.
Pharmacies suffered the most, with 787 chain outlets shutting down. Many of these were Lloyds pharmacies, which have since been acquired by independent operators. Pubs followed with a net loss of 722 establishments, largely due to closures by Wetherspoon’s and Stonegate, the owner of the Slug and Lettuce brand.
According to figures from the Local Data Company (LDC) for advisory firm PricewaterhouseCoopers (PwC), the rate of net closures increased by a third from 3,627, though it remains far below the post-pandemic peak of over 10,000 in 2021. The data excludes the numerous independent outlets operating in the UK.
Retail parks saw a net increase in outlets, while high streets experienced the most significant decline, with a 3.3% drop in trading sites. Banks closed a net 583 branches as Barclays, Halifax, and Lloyds continued their shift towards online services.
The closure of all 400 Wilko stores, which went into administration last August, significantly altered the landscape of town and city centers. Other notable failures included the budget fashion chain M&Co and Joules, which was partially saved by Next, keeping 100 of its 124 stores. These closures contributed to a net loss of 325 fashion outlets last year.
Despite 9,138 new chain outlets opening- the highest number since before the pandemic- the rate of closures outpaced new openings, with a total of 14,081 closures.
Lisa Hooker, PwC’s leader of industry for consumer markets, stated: “The combination of lingering pandemic effects and inflation has accelerated the rate at which chain stores are leaving the market in 2023, with 14 stores closing daily. This also reflects a shift towards online shopping and changing consumer habits.”
Kien Tan, a senior retail adviser at PwC, anticipates a continued decline in chain outlets by about 2%, driven by ongoing trends in online shopping. However, he noted that the move towards experience-based spending and the decline of independent stores may benefit chain hospitality growth.
Lucy Stainton, commercial director at LDC, observed that many larger operators are still adjusting and consolidating their portfolios as consumer spending remains cautious. She suggested that despite ongoing economic and political challenges, the number of new store openings could help close the gap as we move through 2024.