Store openings tumble as Brexit dampens appetite for shops

Store openings nosedived 84% during the three months to the end of June compared to the same period last year, according to figures from the Local Data Company (LDC).

The slowdown resulted in a net loss of 207 shops in the quarter, compared to an increase of 1,284 shops during the first three months of 2017.

LDC’s Retail and Leisure Trends Report said the difference between the two periods was the biggest fall across consecutive quarters for five years.

Just under 3,000 stores opened in the UK in the second quarter of this year, but the figure marks a stark contrast to the 2012 quarterly average of 4,006.

It meant the shop vacancy rate also rose in both May and June, leaving 12.2% of units empty at the end of the quarter.

However, that vacancy rate remains below the 2012 peak of 14.6%.

LDC director Matthew Hopkinson said “the impact of Brexit is clear” in the net loss of stores from UK high streets, which he described as “a clear indicator of the uncertainty that permeates across all aspects of the UK economy”.

He said: “Not only has the trend turned negative with more closures than openings, but the volume of activity has also dropped by 25%.

“Whilst the numbers are currently relatively small to the total number of shops, the vacancy rate in Q2 started to rise and is likely to continue to do so if the current uncertainty continues.”

Hopkinson added: “The role of physical retailing continues to evolve and the place that a shop has in the overall buying cycle varies from brand to brand and sector to sector.

“Stores continue to perform a vital role in the purchase cycle and consumer journey, but the key questions remain around how many shops you need, what kind of format and in which locations.

“With rising costs everywhere for retailers, margins are being squeezed and therefore understanding these micro to macro location trends is fundamental for retailer success.”