Insights & Trends

Causes Of Closure 🏚️

5 min read

According to PWC, in 2018, we saw a record-breaking amount of store closures — 5,833 in the UK alone. With only 3,372 stores opening, we saw a net loss of 2,481 stores, which is currently the largest net decline on record.

Compared to 2017, stores were closing at the same rate — averaging 16 per day, however, openings had dropped significantly by 17.4% year-on-year with a net loss of only 1,772.

When taking a closer look at this research, it's apparent that fashion retailers have the most weight and influence behind these numbers.

If you take a look below at the data that PWC put together, it shows that the quantity of fashion retailer to both open and close stores by far outweighs every other category with 347 openings to 616 closures — netting a loss of 269 stores.

Image & Data: PWC

I'm an optimist, so I tend to see the good in this. I see 347 new stores landing on the high street — entrepreneurs, business owners and retail executives are still inspired and driven to make consumers feel good by clothing them in new and exciting styles.  

Here's what Zelf Hussain (Partner at PWC) had to say:

“We have already seen several casualties in 2019 and there will undoubtedly be more, most likely in all categories except for groceries. Those retailers who will give themselves the best chance of survival must focus on having the relevant proposition, and the investments needed to deliver this proposition; the optimal mix of channels and business portfolio; flexible leases.”

It's about what retailers can do now, we've reached the tipping point so we need to learn and improve:

“Additionally, we believe CVAs are not the answer in isolation. Companies need solutions that fully address customer needs, represent sustainable cost savings and, if needed new money investment to bridge the lag between the cost of a restructuring and long-term performance improvements.”

This week's ramblings is a little less fluffy than usual, but I want to try and centralise all of the information relating to the cause of this decline and help you brainstorm solutions for you to stay relevant to the consumers by improving your proposition.


Let's now dive into a few potential causes that may have impacted this decline.

E-Commerce Growth.

Over the past 10 years e-commerce has grown from having only a 5% share of total retail sales to now accounting for nearly 20%. Consumers have adopted to this behaviour of consumption because it's extremely convenient. They don't have to plan a day out to the shops anymore and directly accumulate any associated costs, they can now have the products they want delivered to their door.

Image & Data: ONS

This means that customers are more likely to go to your site first than pay you a visit to your store, therefore footfall decreases causing a decline in your brick-and-mortar's profitability. This kind of scenario causes retailers to size down, relocate or shut up shop completely and double-down on their e-commerce presence. I agree that reducing deadweight can do you good but first, try to find more opportunities to both subsidise the associated costs and increase the value to your customers — give them an experience they want to tell their friends about.

For example, as part of your omni-channel strategy you could engage your customers and the local community by hosting out-of-hours events, creating interactive layouts, hosting masterclasses and parties or even create a showroom-like environment (allowing the customers to see the product in action, give them some inspiration). Brands such as Ann Summers with their Ultimate Girls Night In, Lush with their interactive product layouts and Harrods with their world-famous in-store brand events pull this off exceptionally well.

Again, give something your customers will remember you for and talk to their friends about, make it "Instagrammable". It's what will make you special.

Alternatively, you could actually use your store's site to store some stock and to fulfil local orders, giving you the ability to deliver your customers' orders in as little as an hour. But be sure to choose the right delivery partner otherwise you could end up being at the centre of some customer horror stories.

Squashed Margins.

If you're in retail, you'll hear a lot of "the margins aren't what they used to be" or something along those lines, and they're both right and wrong.

If your mindset is still stuck in the previous decade then, my friend, you need to adapt to the customers needs — quickly! The opportunity has increased vastly and the associated barriers of entry have been lowered substantially, making it incredibly easy and cheaper to try different ways of doing business.

There's many reasons as to why margins are squashed and it may be worth diving deeper into this on a separate post, but two reason that are extremely relevant to retailers in today's climate are discounting and operating costs.


Black Friday, Summer Sale, Boxing Day Sales, Easter Bargains, Cyber Monday, Halloween Deals, Valentines Day Offers, Back To School Week, Exclusive Freshers Week Deals... You get the idea. It now feels like there's more days created as an excuse to offer discounts than Hallmark occasions.

Consumers now expect all retailers to participate in these events which will eventually lead to your AOV dropping and in-turn your margins will shrink.

When you do participate, because let's face it... you will, try to be in control of the situation. What I mean by this is be selective about what products you put on offer, don't go crazy and put everything up for sale (unless you want the publicity and can afford the take the hit on your margins — this isn't a long-term sustainable strategy though).

Operating Costs.

Along with wages hitting a ten-year high, business rates, commodity prices and pensions are also on the high. Don't let this scare you because there's loads of tools and technology that can help you move faster, automate strenuous tasks (giving you more time to work smarter) and can help you reduce other operating costs.


To sum up my ramblings, my takeaway point would be to find different ways to use your store than integrated into your customers experience, whether it's hosting various types of events, creating a showroom-style store, holding inventory to help you deliver to your online customers quicker and more effectively or if you're a value-based retailer you could go the Primark route by using your site as a catalogue for your products only, giving customers no other option that to come in and make the purchase — very risky if you don't have scale though.

Regardless of the strategy you build for your store, just keep on top of engaging your customers, give them a magical experience and always look for more opportunities for your store — don't just rely on walk-ins, give your store more purpose and reason to stay open.

Again, give me a nudge if you have any questions or even if you want someone to bounce some ideas off, I'm always happy to listen as I love everything about retail.

Email me at

Anyway, until next time!

Author image

About Chris Jordan

Previously managed high-street stores, now a full-on logistics nerd moving things from A to B — all day, every day!
  • Cambridge, UK
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