Critical Overview: The impact of the COVID-19 pandemic on the retail sector in Great Britain has been significant, with over 11,000 outlets permanently closing their doors in 2020. Independent retailers and villages fared better than chain stores and city centres. The closure of major retail groups such as Debenhams, Topshop, and Dorothy Perkins is expected to lead to the vacating of up to 18,000 more shops, restaurants, and leisure outlets, according to the Local Data Company (LDC). While government support, such as business rates relief, a moratorium on evictions, support grants, and furlough pay, helped to slow the pace of closures for independents, the true impact of the pandemic is yet to become apparent.
Impact of Government Support: According to the LDC, the government support provided helped slow the pace of closures for independent retailers by 11% compared to 2019. The LDC had initially expected at least 14,900 outlets to close, but this number was reduced to a net total of 1,442 independent retail, restaurant, and leisure premises that closed their doors in England, Wales, and Scotland in 2020. However, the true impact of the pandemic is still not fully known, as many outlets were temporarily closed during lockdowns and may never reopen after restrictions are relaxed.
Potential Consequences: The end of government support may lead to the “defrosting” of the retail market that has been frozen since the onset of the pandemic, resulting in a worsening of the state of vacancy rates and net change in 2021 and 2022 before leveling out. The collapse of major retail groups could lead to the vacating of up to 18,000 more shops, restaurants, and leisure outlets.
Effects on Different Retail Sectors: In 2020, fashion and clothing stores led the decline, followed by bookmakers, estate agents, and mobile phone shops. Barbers were the fastest-growing high street businesses, followed by beauty salons, fast food outlets, and nail bars. Supermarkets and grocers were among the businesses faring well due to their “essential” status during the lockdowns and ability to trade.
Impact on Different Locations: City centres were hit hard due to the loss of commuters and tourists, with unit vacancies rising by 2.5 percentage points to 16.1%, higher than any other type of location. In contrast, villages with a higher balance of independent retailers were more resilient, with vacancies increasing by just 0.4 points to 11.1%. More local convenience stores opened than closed for the first time in four years, benefiting from the shift to working from home and a desire to avoid public transport.
Conclusion: The data reveals the difficulties in reinventing town centres to be less reliant on retail, with less than a quarter of closed department stores finding new occupiers without being reorganized into smaller units. LDC predicts a similar fate for the 124 Debenhams stores that closed at the end of last year but are not included in the 2020 data. The impact of the pandemic on the retail sector is likely to be felt for years to come, with a need to rethink the sector’s future and adapt to changing consumer behaviour.