The number of net shop closures in the North East hit its lowest level in six years in 2022, though new figures show the retail sector is still in decline.
Data from PwC and the Local Data Company showed that 471 chain stores closed in the region last year with 349 opening. The difference of 122 is the lowest rate of net closures since 2016. PwC described the figures – which mirror the national picture – as “remarkably positive” and said “there are plenty of reasons for optimism” despite a tough period for the retail sector and the challenges facing the economy generally.
Last month the Eldon Square shopping centre in Newcastle revealed that it was at 97% occupancy after a number of openings while research from the British Retail Consortium (BRC) showed a number of retailers are now investing in store openings on the high street.
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The PwC/Local Data Company report says: “Overall, there is a lot of cause for optimism in these results. It’s safe to say that the pandemic retail, leisure and city centre shake-out is over, with all UK regions recovering consistently. The exit of many legacy operators has left some sectors in a much stronger position, and the reduction in online penetration has seen a return of footfall to physical locations. Even with the slight lag relative to other locations, this is good news for the high street, as consumers continue to change the way they both shop for and access information about products.
“Rent levels have also normalised, and with changes to the business rates due to come in April, this should also encourage new openings across most locations, adding to the impressive bounceback of retail parks, shopping centres and the growth of independents.”
The report said that retail parks were faring best in the PwC/Local Data Company survey, benefitting from easier car access and the ability of some outlets to remain open in lockdowns. Takeaways, convenience stores, amusement arcades and DIY shops had the highest number of openings, but banking, charity shops, fashion retailers and employment agencies remained in decline.
The retail sector has been challenged for most of the last decade by the growth of online shopping. PwC and Local Data Company said that the online shopping in the fashion sector had grown from 12% of the market to 23% since 2015, though the current rate is below the 64% seen two years ago during the third pandemic lockdown in the UK.
The report adds: “While there have already been some business failures at the start of 2023, store openings have been announced by both existing and new operators expanding their UK footprint.”
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