The UK high street is facing a renewed wave of closures in January 2025, as eight major retailers prepare to shut down stores amidst a challenging economic climate. This follows a difficult 2024, which saw a significant number of businesses struggle with reduced footfall and lower takings, leading to administrations and cost-cutting measures. The Centre for Retail Research reported a concerning 28% increase in store closures in 2024 compared to the previous year, with approximately 13,479 stores shutting their doors permanently. This trend is predicted to worsen in 2025, with an estimated 17,350 closures anticipated, exacerbated by rising national insurance contributions and increases in the national minimum wage.
Several factors contribute to the ongoing decline of the high street. The lingering effects of the pandemic, coupled with the cost-of-living crisis, have significantly impacted consumer spending. Shoppers are tightening their belts, leading to reduced retail sales. Additionally, the rise of online shopping, accelerated during the pandemic, continues to challenge brick-and-mortar stores. High energy costs and increased business rates further burden retailers, making it difficult for them to maintain profitability. While job losses in the retail sector decreased in 2024 compared to the previous year, the figure remains substantial, with approximately 120,000 jobs lost.
Among the retailers closing stores in January 2025 are The Body Shop, Monki, Matalan, Greggs, The Entertainer, Deichmann, Starbucks, and WHSmith. The Body Shop, despite being rescued from administration in late 2024, is closing two branches. Fashion retailer Monki, owned by H&M, is shuttering two stores as part of a brand merger with Weekday, aiming to create a new, youth-focused retail concept. Matalan is closing a store due to landlord redevelopment plans, while Greggs is closing a single branch for undisclosed reasons. The Entertainer, a children’s toy retailer, is closing a store in Edinburgh, citing budget changes impacting its finances. Deichmann is closing a branch in Newport, Wales.
Starbucks is closing two branches, one on a high street and another within a closing Cineworld cinema. WHSmith, while planning to open new stores in the future, is closing a branch in Bournemouth following a series of closures in the past year. These closures reflect a range of challenges, including changing consumer habits, economic pressures, and specific circumstances like landlord decisions and company restructuring. The closures underscore the ongoing transformation of the retail landscape and the need for businesses to adapt to evolving consumer demands and economic realities.
The difficulties faced by retailers highlight the broader economic challenges impacting the UK. The cost-of-living crisis, driven by inflation and rising interest rates, has significantly reduced consumer spending power. This, coupled with increased operating costs for businesses, creates a difficult environment for retailers to thrive. The shift to online shopping has also fundamentally changed consumer behavior, requiring retailers to adapt their strategies to compete in the digital marketplace. The cumulative effect of these factors has led to a significant restructuring of the retail sector, with many businesses struggling to survive.
Looking ahead, the outlook for the high street remains uncertain. The ongoing economic pressures and evolving consumer habits suggest further challenges are likely. Retailers will need to innovate and adapt to survive in this changing landscape. This may involve embracing omnichannel strategies, enhancing the in-store experience, and focusing on niche markets. The future of the high street will likely involve a blend of physical and digital retail, with businesses needing to find the right balance to cater to evolving consumer demands and navigate the economic headwinds.
