More than four shops a day disappeared from Scotland’s main retail locations in 2021, with shopping centres being proportionally hardest hit.
New research from PwC and the Local Data Company suggests that the rate of closures accelerated as government support through the pandemic was wound down.
Over the course of 2021, a total of 1,424 chain shops were closed in Scotland, with 673 opening, giving a net loss of 751.
This compares with a net loss of 652 in 2020.
The rate of closures in Scotland was third fastest in the 11 nations and regions in Great Britain examined in the study. The net losses increased by 99 compared with 2020, with only East of England (-150) and West Midlands (-167) seeing a sharper increase.
The number of shops across Scotland’s high streets, shopping centres and retail parks has steadily declined in recent years, with net losses being recorded in each year since at least 2016.
The last two years have seen the demise of some large fashion and department store chains which were on the brink of collapse. However, with these stores now closed, future closures should begin to level off and the number of closures is therefore expected to slow through 2022.
Consumer choice of shopping location is impacting the number of closures and in recent years retail parks have consistently outperformed shopping centres and high streets.
The impact of the pandemic exacerbated the popularity of retail parks and since restrictions were lifted footfall recovery has been faster in out of town retail parks, which benefit from easy access and parking.
Conversely, shopping centres have been hit particularly hard by closures of fashion retailers, department stores and casual dining restaurant chains - and are therefore less attractive destinations in their own right.
This was borne out across Great Britain, where retail parks saw the smallest net change of any location (593), compared to high streets (4,287) and shopping centres (1,690). In percentage terms retail parks saw net closures of -4% compared to high streets at -5% and shopping centres at -7%.
Jason Higgs, head of retail for PwC Scotland, commented: “The retail industry is going through a period of enormous flux and in the likes of Glasgow and Edinburgh there are already some radical plans emerging to repurpose city centres.
“We’re seeing everything from flats and hotels to adventure golf courses emerge from the chrysalises of boarded up shops and it is this entrepreneurial flair along with bold action from local authorities and landlords that will entice consumers back into their high streets.”
On a sector-by-sector basis across Great Britain, the growth seen in a small number of categories is nowhere near enough to offset the declines in other categories.
Leisure dominates growth, with takeaway chains buoyed by a rise in delivery as well as walk-in demand. Smaller chains and franchise operators, such as cake shops and amusement arcades, have also been able to take advantage of lower rents and vacant units to expand their footprints.
The big net declines in many other categories reveal the impact of major shifts in how consumers buy and transact. The shift to online, accelerated by consumer behaviour during Covid-19 lockdowns, continues to be the biggest common denominator for closures in both retail and services.
Fashion is the fastest declining category with several chains acquired by online operators with no ambition to operate stores.
The Local Data Company tracked 203,718 outlets operated by multiple operators across Great Britain, between 1 January and 31 December 2021.
Net change is openings minus closures. The percentage change is derived from the net change figure relative to the total number of live multiple businesses.
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