17,500 chain stores close in 2020 due to COVID restrictions
- UK retailers forced to close shops as lockdown restrictions cause a collapse in high street footfall
- Thorntons and Greggs confirm shop closures and shed jobs
- Screwfix expected to create more than 600 jobs across Great Britain
- UK business confidence jumps to the highest level since 2015
According to official figures, more than 17,500 chain stores closed across the UK in 2020 due to the impact of the coronavirus pandemic and lockdown restrictions that were introduced back in March.
Conversely, only 7,655 new shops were opened, resulting in a net loss of 9,877 businesses – a third higher than that in 2019.
Figures compiled by London-based retail location insight company, Local Data Company (LDC), reveal that an average of 50 shops, restaurants, hospitality venues and other high street businesses collapsed every day across England, Wales and Scotland last year.
While most non-essential retailers are scheduled to reopen their doors again from April 12th, several analysts have warned that the impact of lockdown restrictions on high street stores is yet to be fully seen.
With high street stores closed due to the lockdown, consumer habits have changed, and the massive shift in the digital footprint has forced many retailers to move their operations online to stay viable.
The alarming figures also come before the UK government imposed the third national lockdown, meaning that upcoming data will likely paint a far darker picture of Great Britain’s high streets. Some shops included in LDC’s findings were temporarily shut last year but may never be able to reopen following the third national lockdown that was reimposed in December.
According to the figures compiled by LDC, London bore the brunt of shop closures, accounting for a third of the overall decline in 2020 as city centres were hit harder by lockdown measures.
However, Wales, Scotland and smaller towns in England that are less populated with chain stores have fared better amid the pandemic.
Meanwhile, retail parks accounted for the smallest number of net closures of any shopping location, with amenities such as cinemas and gyms and free parking cited as the reason for resilience.
That said, LDC’s Head of Retail and Strategic Partnerships, Lucy Stainton, warned: “When government support schemes end, we expect store closures to increase before the picture starts to improve.”
Several well-known retailers, including Debenhams and John Lewis, are bracing for permanent closures, while TopShop, a branch of the Arcadia empire, has closed all its chain stores indefinitely.
Thorntons and Greggs are the latest retailers to announce job cuts and store closures.
Thorntons and Greggs make shop closures
According to the latest reports, Thorntons is on the brink of collapse, leaving more than 600 jobs at risk.
COVID lockdown restrictions have battered the confectionery giant, and nearly all Thorntons 61 stores have been shuttered for the best part of 12 months.
Thorntons had planned to upscale its operations last year and pumped GBP 45M into the business to revamp its stores and cafes, but the project was delayed due to COVID-19.
The high street’s changing dynamics have weighed heavily on the chocolatier. The boom in online shopping has caused the company to rethink its business strategy due to challenging circumstances.
Adam Goddard, retail director at Thorntons, said: “We understand that this will be an uncertain and concerning time, and we will actively support our colleagues during this time.”
The London stock exchange-listed retailer Greggs has also confirmed the permanent shutdown of 56 shops.
It comes as the British bakery chain reports its first annual loss in more than three decades, delivering a stark warning to employees that the road ahead will likely be challenging.
Chief executives at Newcastle-upon-Tyne based company said the company suffered a pre-tax loss of GBP 13.7M last year, against a GBP 108.3M profit in 2019.
However, Greggs bosses remain optimistic about their post-lockdown prospects and hope to launch 100 new stores throughout 2021.
It comes alongside consensus forecasts that the UK economy will rebound sharply in the second quarter of 2021, as a release of pent-up demand is expected to trigger a consumer spending boom.
Greggs praised Chancellor Rishi Sunak’s furlough scheme and business rates holiday for supporting the company amid highly challenging conditions and said 2020 figures came in better than expected.
While many UK businesses have suffered amid the pandemic, most are confident about their post-COVID futures, especially with the vaccine programme well underway.
Screwfix expected to create more than 600 jobs
UK retailer Screwfix announced plans to expand its operations and create 600 jobs across the UK and Ireland in 2021 after enjoying a solid performance in 2020.
The multichannel retail company is on track to reach GBP 2BN in total sales this year and have identified “new opportunities to expand their business with stores in inner cities and rural catchment areas.”
Screwfix, which employs more than 11,600 people across 711 chain stores in the UK and 12 in Ireland, now plans to open 40 stores in the UK and 10 in Ireland, on top of 3,500 roles created last year.
Their announcement comes as Accenture/IHS Markit reveal that UK business confidence has surged to its highest level in six years, with the success of the UK’s vaccine rollout and Prime Minister Boris Johnson’s lockdown exit strategy buoying hopes.
UK business confidence jumps to its highest level in 6 years
According to Accenture/IHS Markit, the business outlook for post-Brexit Britain has increased sharply in 2021, up from 34% in October to 68% this month.
The UK’s rapid COVID vaccine rollout is being cited as the driving force behind growing business confidence. More than 24 million people have received their first vaccine dose across England, Scotland, Wales, and Northern Ireland.
The latest reading is also sharply higher than the most recent levels recorded in the US, Japan and mainland Europe.
Accenture/IHS Markit also revealed that hotels and hospitality venues are most confident about their prospects after being least optimistic when the survey was last conducted.
Employment intentions have also surged, with 30% of survey respondents indicated a robust jobs recovery once lockdown restrictions are lifted.
However, Sacha Lord, Greater Manchester’s night-time economy adviser, is launching a legal bid over plans to reopen hospitality venues after non-essential retail stores.
Sacha Lord said UK Prime Minister Boris Johnson’s justification of reopening non-essential businesses before hospitality venues are unfounded.
Mr Lord claims that hospitality venues are safer than non-essential stores as stricter social distancing measures can be imposed and more easily monitored.
Sacha Lord also noted that hospitality is more important for communities and mental well-being. Reopening these venues on May 17th could have a “potentially indirectly discriminatory effect” on young people and employees from BAME backgrounds.