THE scale of the impact on the retail sector from the pandemic has been underlined by new research which reveals chain store closures quickened in Scotland in the first half of the year.
Nearly 800 chain stores closed their doors in Scotland between January and June this year, a period marked by protracted lockdown north of the Border, while just 344 opened.
The net loss of 436 stores represents a 2.8 per cent decline in store numbers over the six months, the research from accountancy giant PwC and the Local Data Company (LDC) has found.
This marked an acceleration of closures compared with the first half of 2020, when there was a net loss of 393 chain stores, which equated to a 2.4% fall in numbers.
And the pace of closures in Scotland between January and June this year was faster than across Great Britain as a whole, where the shuttering of 8,700 chain stores led to a net decline of 5,251– a 2.5% drop in shop numbers.
Non-essential retail stores in Scotland were closed from Boxing Day until April under measures to suppress coronavirus infection rates.
And the first half of 2021 was characterised by the loss of further big-name stores from the Scottish retail scene.
Debenhams, the historic department store chain, vanished from the high street for good in May after its brand and intellectual property assets were snapped up by boohoo. Debenhams had 15 outlets in Scotland, including huge department stores in Glasgow’s Argyle Street and the Silverburn shopping centre.
The high-profile Jenners department store on Edinburgh’s Princes Street also closed in May, while scores of high-street shops formerly run by Arcadia have also been shuttered.
Shopping centres were found to have had a harder time than the high street in Scotland in the first half. According to the report, 163 chain stores closed in Scottish shopping centres while just 23 opened, resulting in a net decline of 6%.
At the same time there were 550 closures on Scottish high streets, offset by 263 openings, which led to a 2.4% fall in store numbers.
PwC and LDC classify chain stores as outlets belonging to nationwide groups with five or more stores. The report signalled that Scottish high streets were more resilient than their Great British counterparts, where the net decline of store numbers was 3%.
Retail parks in Scotland saw an overall decline of 1.1% as 67 chain shops closed and 52 opened.
The report observed that retail parks benefited because they are typically anchored by grocery, DIY and home furnishing retailers, which have performed better than other retailers amid the pandemic. That consumers tend to drive to retail parks was also in their favour, as people sought safer ways to travel for health reasons.
Shopping centres were suggested by the report to have been disadvantaged because they are often less conveniently located for people who have been keen to shop locally during the pandemic. They are also generally populated by fashion stores and chain restaurants, which have seen among the biggest net closures over the last year.
The decline of high-street footfall has affected multiple retailers located in such locations, particularly those in large city centres, the report added.
PwC and LDC highlight in the report the support provided to the retail sector since the pandemic took hold, in the form of furlough and business rates relief as well as moratoriums on rent that have prevented operators from being evicted because of non-payment or arrears.
They note that such measures have allowed stores to continue trading from sites even where they have been affected by lockdown.
However, they warn the next six months will be “crucial” as support measures are gradually withdrawn.
Jason Higgs, head of retail at PwC in Scotland, said: “We were already seeing a fundamental change in consumer shopping habits before the pandemic hit, and what we are seeing now is the full impact lockdowns have had on the high street and shopping centres, though without government support the picture would be considerably worse.
“The next six months are going to be crucial for the retail trade, and we will have to wait to see whether consumers will shop with their feet or their fingertips.
“From what we are seeing, consumers are still looking for a physical shopping experience for ‘revenge spending’ after a lengthy period at home.
“We still saw more than 300 new stores open in Scotland, so there are opportunities for retailers and hospitality operators who are able to open new stores or to move to better locations.”