UK SHOP CLOSURES SET TO INCREASE FOLLOWING BUDGET TAX REFORMS

Mon 24 March 2025:

UK high streets are expected to see a faster rate of closures this year due to increased business costs linked to Rachel Reeves’ budget. This follows a slowdown in closures in 2024, which saw a drop to 10 closures a day from 13 in 2023, as reported by The Guardian. While 2024 showed some improvement in the high street landscape, significant closures of well-known banks and retail chains still occurred, with net store closures being the second lowest in a decade, only surpassed by the post-pandemic rebound of 2022.

In total, over 12,800 stores shut in 2024, 1,277 fewer than in 2023, while 9,002 stores opened, a slight drop from the previous year. Predictions for 2025 are grim, as the increase in minimum wage and national insurance costs is expected to accelerate closures. Kien Tan of PwC noted that many retailers are being cautious with new openings due to higher operating costs, suggesting that fewer new sites will be viable in the future.

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Although consumer confidence improved slightly in 2025, following a record low in February, there are concerns about the impact of job cuts linked to Reeves’ policies and their effect on consumer spending. Retailers are adjusting their expectations, with increased spending anticipated on food and home improvements, especially in the wake of rising inflation on essential items.

Despite the challenges, the vacancy rate for high streets, retail parks, and shopping centers has stabilized post-pandemic, aligning with the shift to online shopping. In the long term, retail destinations are predicted to shrink by 2% annually, as key services like banks and chemists close, reducing the reason to visit.

In 2024, closures were notably high in sectors like banking, pubs, chemists, and car services, with Lloyds pharmacies and Wetherspoon’s closures significantly contributing to the numbers. UK banks, which have closed over 6,000 branches in the past nine years, continue to reduce their physical presence, with Santander and Lloyds announcing further closures in 2025.

On the other hand, convenience stores, such as smaller Morrisons and Asda locations, along with coffee shops and budget retailers, saw expansion. PwC’s biannual report tracks over 200,000 chain stores in 3,500 locations, providing insights into the changing retail environment, though independent stores are not included in the study.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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