Member Article

Fewer shops opening in North East as retailers focus on online sales

Fewer store openings in the North East in 2014 meant the overall number of shops on the region’s high streets fell last year.

According to PwC research compiled by the Local Data Company (LDC), 149 outlets opened in the North East countered by 213 closures. This equates to a net reduction of 64 shops, though this is one of the lowest reductions of the UK regions (see table 1).

This is despite the rate of closures of multiple retailers (shops with more than five outlets) in the North East stalling to around four a week in 2014, the same as the previous year.

The study of 500 town centres across Great Britain found that within the region, Newcastle saw a net loss of 22 stores, as 45 new stores opened but 67 closed throughout the year.

Sunderland saw a difference of -7 while Durham and Hexham bucked the trend with small net increases over the year.

Sean Hamilton, restructuring director at PwC in Newcastle, said: “The region’s high street continues its drastic overhaul in response to the advance of online sales and changing consumer demand, and this year’s numbers expose the harsh impact of ‘macro’ changes on the high street, especially in certain sub-sectors.

“Regulation has blindsided the money shops, the advance of technology has hammered some phone operators and the internet continues to dent the clothing sector. Despite the benign economy, the net loss of shops has accelerated. The insolvencies of Phones4U, Blockbuster, Albemarle & Bond, and La Senza, a diverse cross-section of the retail market, epitomise these factors.

“Despite the continuing problem of closures, new sub-sectors, such as discount shops keep growing. The strength of the restaurant and fast-food sectors is also a fillip for the high street.”

Bill MacLeod, PwC’s senior partner at PwC in Newcastle said; “We’re again seeing the continued effects of the digital revolution and consequent change in customer behaviour play out on the high street - these trends have been with us for some time and we should expect the rate of closures to continue.

“Customers are embracing new mobile technologies, traditional retail channels to market are being wiped out and new channels are being created, often in the online rather than the “real” world.

This was posted in Bdaily's Members' News section by Ellen Forster .