The UK high street experienced a significant downturn in 2024, with nearly 13,500 shops permanently closing their doors, a 28% increase compared to 2023. This translates to approximately 37 closures per day, painting a bleak picture for the retail landscape. The decline was attributed to various factors, including cost-cutting measures, insolvencies, and a shift in consumer behaviour. Independent retailers bore the brunt of the closures, accounting for over 11,000 of the shuttered businesses. Footfall also suffered a significant decline, with a 2.2% drop overall compared to the previous year and a sharper 2.5% decrease in December, a typically crucial month for retailers. The British Retail Consortium described December as “drab,” highlighting the challenging trading conditions. The outdated business rates system was cited as a major obstacle to investment in town centres and high streets, further exacerbating the difficulties faced by traditional retail spaces.
The dwindling footfall was not evenly distributed across the UK. Northern Ireland experienced the most significant decline at 5.8%, followed by Wales at 2.6%, England at 2.1%, and Scotland at 1.5%. Retail parks emerged as preferred destinations for shoppers, likely due to the convenience of free parking and the wider selection of larger stores. This trend further compounded the challenges faced by high street shops, which often struggle to compete with the amenities and scale offered by retail parks. The festive period, traditionally a lifeline for retailers, proved to be “disastrous,” with footfall plummeting by 11.4% in the final week before Christmas compared to the previous year. This slump significantly impacted retailers’ bottom lines and contributed to the overall negative trend.
The Centre for Retail Research offered a grim prognosis for the future, predicting an even steeper rise in store closures in 2025, reaching an estimated 17,350. This forecast suggests that the challenges facing the high street are far from over and that the retail landscape may undergo further significant transformations in the coming years. The vast majority of these anticipated closures, around 14,660, are projected to be independent retailers, further underscoring the vulnerability of smaller businesses in the face of economic headwinds and evolving consumer habits. This gloomy outlook casts a shadow over the future of the high street and raises concerns about the vitality of town centres.
Beyond the high street, the manufacturing sector also faced significant challenges. Factory output contracted at its fastest pace in 11 months in December, reflecting a struggling domestic economy, weak export sales, and growing concerns about future costs. The S&P Global UK manufacturing PMI survey revealed a decline in output scores, indicating a shrinking manufacturing sector and adding to the overall economic concerns. This contraction highlights the broader economic difficulties faced by the UK, extending beyond the retail sector and impacting various industries.
Amidst the challenging economic landscape, there were some glimmers of positive news. Budget supermarket chain Lidl reported a 7% increase in sales during December, exceeding £1 billion in turnover. This success was partly attributed to the increased demand for festive food items, with significant growth in sales of party food, champagne, and traditional Christmas dinner components. Lidl’s growth allowed it to gain market share in the UK grocery sector and attract nearly two million additional customers during the festive season. This performance contrasts sharply with the struggles faced by many other retailers and highlights the resilience of the discount grocery sector in times of economic uncertainty.
Other notable developments included the completion of Coventry Building Society’s takeover of The Co-operative Bank, returning the struggling institution to mutual ownership. This merger creates a combined entity with substantial assets and a significant customer base, offering potential for future growth and stability. The Co-op also announced plans for expansion, aiming to open 75 new stores and refurbish 80 existing locations in 2025. This focus on expansion signals a commitment to growth and accessibility, with the Co-op aiming to reach eight million members by 2030. These developments offer a counterpoint to the prevailing narrative of decline in the retail sector and suggest that opportunities for growth and innovation still exist despite the challenging environment.
