According to the Centre for Retail Research, the number of stores closing on Britain’s High Streets. Retail parades, and out-of-town shopping parks increased dramatically in 2022. (CRR).
More than 17,000 websites ceased operations, the greatest number in the past five years.
The total number of closures was approximately 50 percent more than in 2021, according to the experts.
The number of retail jobs lost, both in-store and online, increased as businesses closed or reduced expenses.
More than 150,000 positions were eliminated, a 43 percent increase from the previous year.
During the height of the pandemic, several firms were shielded by government aid. And the furlough program, which helped pay employees when stores were closed.
As the economy began to recover in 2022, however, the retail sector encountered a bombardment of obstacles.
As prices soared substantially, consumers reduced their spending. Costs for retailers also increased, with significant increases in energy and labor expenses.
The CRR, an independent research organization that analyses retail sector trends, reported 47 store closures each day in 2022. During the course of the year, huge retail chains closed 6,055 stores, while independents closed 11,090.
Only about one-third of closures were due to insolvencies
According to the CRR, the number of stores closing because a parent chain with more than 10 outlets failed decreased. In 2022, there were 56% fewer closures in this category compared to 2021, although they included notable brands such as M&Co, Joules, McColls, Sofa Workshop, and TM Lewin.
Nearly one-third of the closures were branches of chains that were closing some locations to save money and streamline their operations. Some companies, such as Marks and Spencer, simultaneously opened new stores in multiple places.
More than a third of the closures were independent stores that elected to close, which is also considered rationalization.
“Rather than firm failure, rationalization now appears to be the primary driver for closures. As retailers continue to rapidly cut their cost base,” stated CRR director Joshua Bamfield.
He anticipated the tendency to continue in 2023, although “a few major players may collapse as well.”
Beginning in April, the government will provide temporary assistance. With business rates, the tax based on the value of a company’s properties. This will take the form of a 75% rebate on business rates, with a cap of £110,000 per business.
Vacant stores are exempt from property taxes for three months. After that, they will be charged the full fee and will no longer be eligible for the 75% discount.
Robert Hayton, head of the UK-based real estate advisory firm Altus, has urged for a reevaluation of the approach to vacant properties.
“Rate-free periods must be extended immediately to reflect the actual time required to re-lease abandoned buildings,” he said.
