The crisis facing Britain’s High Street could result in more than 200 shopping centres falling into administration, experts say.
The rising popularity of online shopping combined with the downfall of large ‘anchor stores’ such as BHS and Toys R Us causes a ‘downward spiral’, according to Nelson Blackley, Senior Research Associate at Nottingham Business School.
‘If centres close, particularly in small towns, it will be catastrophic,’ Mr Blackley told the BBC.
‘We have too many of them, doing exactly the same – the same range of stores and products – and basically that’s not attractive,’ he added.
The Broadmarsh Centre in Nottingham (pictured) has been described as ’empty and soulless’
Several centres at risk of closure are owned by US private equity firms with deals that would need refinancing.
Mr Blackley, Senior Research Associate at the National Retail Research Knowledge Exchange Centre, said that online retail in the UK was growing faster than almost all other retail markets in the world.
‘If the major anchor store moves out, that has a halo effect on other stores in that centre. It’s a downward spiral and you can’t fill shopping centres with nail bars and vape shops,’ he said.
Figures released in September revealed that up to 100,000 retail jobs had been axed from the High Street over the past three years.
Labour analysis of Office for National Statistics data showed that jobs in retail shops had plunged by 98,000 between June 2015 and June 2018.
Business rates and soaring rents are challenges that face traditional retailers, in addition to the onslaught by online markets.
Jasmin Stephenson, from Eastwood, Nottinghamshire, said she would only go to the Broadmarsh shopping centre if she had to
Falkirk’s Callendar Square shopping centre in Stirlingshire was bought by Colony Northstar in 2015, but the following year, despite being valued at more than £25million, it sold for little more than £1million, local media reported
The previous week John Lewis admitted that profits had plunged by 99 per cent to just £1.2million in its half-year results.
Poundworld, Maplin and Toys R Us went bust earlier this year.
Mr Blackley highlighted Financial Times research which suggested that roughly £2.5billion worth of shopping centres and retail parks are up for sale in towns and cities across the UK.
Kettering’s Newlands Centre (pictured) is backed by private equity and has had a number of its outlets face closure
He added that the trend is moving rapidly and it would be unfortunate to be a shopping centre owner in the current climate.
BHS’ collapse two years ago left roughly 200 shopping centres with empty units – more than half of which have still not been filled, Mr Blackley said.
But it’s not just big businesses on Britain’s High Street feeling the squeeze.
In July this year the Daily Mail reported on family-run and small businesses feeling the pinch over the crisis facing retailers.
Bookseller Georgia Duffy, 28, opened Imagined Things, the only independent bookshop in Harrogate, North Yorkshire, last year.
Ms Duffy, a former radiographer, left her health service role for self-employment but shortly before the one-year anniversary of her store’s opening she wrote on Twitter that her shop had only taken £12.34 all day.
‘Things have been tough recently – today the worst day ever,’ she wrote.
The tweet was read more than one million times and the following day her shop was overrun with orders from across the country, but the comment highlighted the strain that ‘conventional’ business owners are facing.
Stafford’s Guildhall centre has seen several retailers relocating to the new Riverside complex in the town
Richard Hunt, 72, has run Hunt’s of Marlow in Buckinghamshire with his wife for 22 years.
The hardware shop owner said: ‘We used to do a lot of model railways but the internet killed that stone dead.
‘We get people who come in to look, touch and feel. You show them it running and off they go to buy it online.’
The death of the High Street in Britain?
Thousands of shops are closing across Britain as record numbers of customers buy on the internet.
A total of 1,772 stores disappeared from the UK’s busiest town centres last year – meaning almost five closed every day.
Foreign internet rivals such as Amazon are taking their business, with 18.2p of every pound forked out by shoppers now spent online.
A string of retailers have recently gone bust or are facing an uncertain future. More than 50,000 retail jobs have already been lost this year.
This is likely because in 2008, just 4.9 per cent of shopping was done online, but last August the figure was a record 18.2 per cent.
Hunt’s of Marlow was once sat on the town’s high street but relocated to larger premises 11 years ago when rents became too expensive.
Mr Hunt said: ‘Marlow itself is a very busy, lively town but there’s a total change of trading in the town.
‘I couldn’t believe how many coffee shops there are in the town and they have always got people in them.’
Shoppers are also noticing the changing face of Britain’s High Street.
Nottingham-based mother and daughter Helena Waszczyszyn and Anja Ramsden described their city’s Broadmarsh Centre as ’empty and soulless’.
Ms Ramsden said the centre was ‘desolate’, with shops continuing to leave the centre one by one.
Jasmin Stephenson, from Eastwood, Nottinghamshire, said she would only go to the shopping centre if she had to.
Steve Hall, from Essex, said that he likes shopping centres but they seem to be dying out.
The Newlands Centre in Kettering, which has private equity backing, has had several outlets face closure, and Stafford’s Guildhall centre has seen several retailers relocating to the new Riverside complex in the town.
Daniel Mead, from asset management firm APAM, said that shopping centres across the country are being affected by the crisis regardless of their location.
But although they are similar in the capital structure behind them, complexes in richer areas could be easier to save, Mr Mead said.
He added that facilities such as libraries, medical centres and schools could all see a future within retail complexes, citing a new school in Richmond which is being built above a Lidl.
But investors have short-term approaches and lack the skills required to embrace a significant change in the way centres operate, Mr Mead said.
Which high street retailers have closed shops in 2018?
House of Fraser nearly plunged into administration but was rescued at the eleventh hour by Mike Ashley
The year has seen a bloodbath of Britain’s high streets – with many of the nation’s retailers shutting stores and axing jobs.
Here are some of the big name retailers which have lost out as they face fierce competition from the rise of online shopping
The carpet retailer is closing 92 stores across the UK.
These closures represent nearly a quarter of all UK Carpetright stores.
Toys R’ Us
The UK’s largest toy shop went into administration in February 201, leading to an estimated 2,000 redundancies.
House of Fraser:
The department store chain was on the verge of heading into administration but was rescued at the eleventh hour by Sports Direct owner Mike Ashley.
The electronics giant has gone bust, closing shops across the country and putting thousands of jobs at risk.
The baby and toddler chain is closing 60 shops across the UK putting up to 900 jobs at risk.
Poundworld announced it was going into administration on June 11 after talks with potential buyer R Capital broke down, putting 5,100 jobs at risk.
The DIY chain set to close 42 DIY outlets shut, putting around 1,500 jobs at risk.
Marks & Spencer:
The retailer announced in May it plans to close 100 stores by 2022, putting hundreds of jobs at risk.
In August stores in Northampton, Falkirk, Kettering, Newmarket, New Mersey Speke, Stockton and Walsall all ceased trading.