Could retail and leisure emerge from this challenge leaner and stronger?
High street retail and leisure may be on the edge of a precipice: Fewer openings, an increase in closures, and permanent changes to the make-up of shopping and leisure destinations. But while there may be worse to come, consumers still want to spend, so there’s every chance for businesses that evolve now to come out leaner, smarter and stronger.
Last year, we saw record store closures but glimmers of positivity for certain sub-sectors. This year, retail and leisure were always going to see challenges, and our most recent store openings and closures research paints a particularly bleak picture of what’s to come. Arguably, however, the crisis has simply accelerated a restructuring that was already needed: it’s just more painful than expected due to the speed of change, which has left businesses little time to react.
Even so, COVID-19 hasn’t revolutionised the way we shop. It has created a step-change in shopping behaviours and encouraged forced experimentation, but that is more of an acceleration of the trends we’ve already seen: a shift to online, changing priorities in shopping categories and a more rapid shift away from outdated, poorly delivered store formats.
We know that retail is resilient: even in the face of a global pandemic and a national lockdown, sales had already recovered to pre-COVID-19 levels by July, though with a shift in categories and channels.
This year’s headline figures are testament to this resilience. Amid accelerating closures (a record 11,120, and record net decline of -6,001) there have still been consistent openings (5,119 - the highest since 2017).
But even this industry has its limits.