The state of the UK’s high street continues to diminish.
With around 14 shop closures reported every day in 2023 alone, the future of the high street isn’t looking promising.
Meanwhile, London was reported as the least viable for businesses looking to open physical stores.
The decline of the high street – brands that are in trouble
As of September 2024, a total of 6,945 have closed so far this year – equivalent to 38 shops per day.
According to research by accountancy firm PwC, chemists, pubs and banks have been hit the hardest. Brands like Boots and Wetherspoons have also announced further store closures earlier this year.
Health and beauty retailer Boots announced that it was closing 300 stores as part of a cost-saving program – aiming to save around £618 million altogether.
Meanwhile, JD Wetherspoons announced it would be putting several of its UK sites up for sale, with 41 officially closed. TGI Fridays also recently fell into administration, selling off all 87 of its restaurant locations. Meanwhile, bank branches including Lloyds, Halifax and Bank of Scotland are also set to close 292 stores between 2024 and 2025.
Other well-known brands, including The Body Shop, Ted Baker and LloydsPharmacy all filed for administration this year.
The best (and worst) places to open a physical store
With inflation on the rise and the cost of living crisis still ongoing, opening a brick-and-mortar store can be like walking a tightrope. But introducing your brand on the high street isn’t entirely out of the question.
London is the least viable for new businesses
It shouldn’t come as a surprise that the capital city tops the list for the most expensive city to set up shop. Even the famous Oxford Street has been struggling, losing out to online shopping following the COVID-19 lockdown measures.
“Oxford Street was once the jewel in the crown of Britain’s retail sector, but there’s no doubt that it has suffered hugely over the past decade,” The Mayor of London, Sadiq Khan, stated. “Urgent action is needed to give the nation’s most famous high street a new lease of life.”
Research by Capital On Tap revealed that London rental costs were at £3.02 per square foot. Purchasing property can set businesses back £416.98 per square foot, while handyman services cost around £39 an hour.
Plymouth, Newport and Nottingham revealed as the most viable locations
London might be out of reach for now, but Plymouth and Newport were found to be the best places to open a physical shop.
For example, the average monthly rental cost per square foot is just 76p in Plymouth and 82p in Newport. Additionally, costs for handyman services and essential utilities (eg mobile plans and internet) are under £30 per month.
On the other hand, Nottingham was reported to have an unemployment rate of 6.5%, making it an appealing choice for hiring new workers.
High street brands that are succeeding
It’s not all doom and gloom though.
While these recent closures might seem grim, there are actually some businesses that are performing exceptionally well on the high street.
Itsu aims to open 80 new restaurants
In July 2024, Asian-style restaurant Itsu announced plans to open 80 new restaurants across the UK. This will include expanding to major city centres to capitalise on shoppers, commuters, tourists and students.
As of September 2024, the company has reported a record full-year revenue of £161 million, while its franchise sales have grown from £540,000 to £635,000 in 2023.
The company attributes its growth in sales figures to people’s return to office following COVID-19.
“Itsu retail saw a shift in trading in 2023; transport hubs showed higher customer growth while the city resumed pre-COVID sales levels, moving from a three-day to a four-day week,” Itsu said in a statement. “Following a period of opening more shops in suburban areas, the confidence to open large, prominent, higher-rent restaurants returned as post-COVID trading patterns became clearer.”
Primark continues to dominate
Primark products not being available to buy online definitely raises some eyebrows, but the popular fashion retailer is standing strong. Even after its £1 billion loss following lockdown, the company stood its ground on remaining in-store only.
It introduced its click-and-collect service in 2022 and recently announced a further 54 stores to launch this service, including Derby, Birmingham and Corby.
This new service saw profits for the company skyrocket. Sales increased by 46% to £508 million, with a margin recovery of 11.3%.
M&S announces store renewal plans
Long-time retailer Marks & Spencer (M&S) unveiled plans to expand its convenience stores, including 10 new stores and 50 renewals. By the end of the year, the company plans to operate in over 40 UK train stations, hospitals, and airports.
Alex Freudmann, Food Managing Director at M&S, stated: “Our renewal programme is all about making sure we have the right stores in the right place and with the right space and this applies to our convenience stores as well.”
“The new renewal format for our convenience stores maximises these small spaces to deliver the M&S Foodhall experience for the missions our customers are shopping for as they travel,” he added. “By renewing and growing our convenience estate, we’ll continue to deliver for our customers, however, whenever and whatever they want to shop with us.”
The company’s revenue rose from £11.9 billion to £13 billion in the 52 weeks up to the end of March 2024 – a 9.3% increase from the previous year.
Keep up to date on the latest high street casualties with our list of UK brands that have gone into administration since COVID.
