Post pandemic retail recovery sees lowest number of East Midlands store closures since 2017

Throughout 2022, 493 shops opened across the East Midlands, compared to 702 closures, creating a net decline of 209 (-1.4%), the lowest since 2017. This highlights a great improvement since 2021, where the East Midlands saw 528 store openings and 1,146 closures, a net change of 618. 

The East Midlands performed third best out of the regions across GB, following the South East  and Scotland in first and second. The West Midlands was the worst performing region overall, with a net closure rate of -2.3%, below the national average of -1.4%.  

Speaking about the East Midlands report, Sarah Phillips, PwC Partner and Consumer Markets Leader for the Midlands, comments:

“It’s pleasing to see the East Midlands retail and hospitality sectors experiencing slower rates of closure and the difference between openings and closures narrowing. We’re seeing recovery through a bounce back in a variety of sectors, most notably takeaways, convenience stores, DIY and pet stores, helped by pandemic trends. Retail parks and shopping centres are holding strong, and the East Midlands benefits from multiple strong locations.

“High Streets are also recovering well and we’re seeing more innovative store openings, embracing technology and creating experiences for younger consumers. There is a trend of combining multiple offerings and better utilising space, mixing fashion with lifestyle, beauty and hospitality.

“There are challenges ahead with a potential recession and the cost of living crisis continuing, however we have seen how quickly the tide can change and there is positive growth for retail across GB, as more people return to work and offices, boosting the high street.”

Retail parks remain the most resilient outlet type with a small -0.3% closure rate, and shopping centres (-1.6%) are also recovering at a promising rate. High streets were slightly lower at -2.6% but all outlet types saw a significant improvement in their net closure rates. 

The variation across the regions has also narrowed - a trend first noticed in the first six months of 2022. That trend has continued to the extent that regional variations have nearly disappeared. This year has seen the spread of results (GB average -1.7%) have less than one percentage point between the worst performing (West Midlands at -2.3%) and the best (South East -1.3%). This is a positive turnaround for London, which was particularly hard hit by the pandemic lockdowns. It was -5.8% in both 2020 and 2021, significantly worse than any other region, but just -2.2% in 2022.

Lucy Stainton, Commercial Director for the Local Data Company who collect the research talks about the trends in the 2022 data: 

“CVA and administration activity dropped in 2022, helping to drastically reduce the total number of closures across the market.  Alongside the benefits of the first full year free from restrictions, the return of office workers and tourism boosted footfall, supporting new store openings.

Shopping centres bounced back in 2022 after a turbulent period as acquisitive brands opened units across destination centres. Retail park performance also improved as easy access, free parking and the convenience of these locations attracted shoppers. 

Stronger than anticipated golden quarter performance provided a solid base from which to start 2023, as postal strikes drove shoppers back to bricks and mortar for their Christmas shopping. We expect 2023 to remain positive with funding available for stores to protect against high energy prices, the continuation of workers returning to offices and a revision to business rates providing much needed support to navigate current market headwinds.”

Eight of the 100 outlet categories tracked by the Local Data Company saw net growth in double digits. Of those, leisure outlets accounted for half. 

Takeaway stores continue to top the league table for new openings, with demand for both food on the go and  home delivery continuing post pandemic. Many are franchise operators, as are the other success story: convenience stores. Nimble, with significant local knowledge and capital-light, these local entrepreneurs can move quickly and service gaps in the market backed by strong brands and helped by lower rents as other operators have retreated post-pandemic. Other categories, such as DIY and pets are bouncing back, helped by pandemic trends.