Future of Work

There was a “dramatic” fall in the number of shop openings in the first half of the year, according to a new report from the Local Data Company.

It found 20,804 shops opened in the UK between January and the end of June, down 15% on the second half of 2015. The slowdown was surprising as the first few months of the year typically see a surge in new shops opening up.

The LDC said worries over the state of the global economy and concerns over Brexit were probably behind the fall.

Describing the slowdown as a “dramatic fall”, Michael Weedon from the LDC said Brexit was not entirely blame.

“In January and February people were not thinking, ‘better not open a shop’,” he said. Instead, concerns over the global economy were likely to have weighed on the minds of entrepreneurs.

The LDC report showed that the number of shop closures also fell in the first half of the year, but by only 5% to 22,801.

All told, closures exceeded openings by 1,997 – reversing the situation in the second half of 2015 when openings were ahead of closures by 335.

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What’s next?

The vacancy rate fell for most of the first half of the year, as shops were demolished or used for other purposes faster than new buildings were put up.

However the vacancy rate for shops and leisure premises edged higher in June, rising to 11.2%.

“Whether this will be just a twitch in the statistics or the beginning of a long term reversal will become clear over the coming months,” said Matthew Hopkinson from the LDC.

“For example, the 23% net growth in restaurants since 2010 is unlikely to continue.

Business, government and the media are all sniffing the air and scanning the horizon for any piece of news that might tell us what happens next,” he added.

Following the financial crisis of 2007, the vacancy rate hit a high of 12.4% in 2011, and has only declined modestly since then.

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