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Increase in the number of independent openings subdued by a rise in closures across GB


Data released today by The Local Data Company (LDC) and British Independent Retailers Association (bira) shows that there has been a decrease in the number of traditional independent shops compared to the same period last year, along with a fall in the number of national chains. The independent sector saw a decrease of -1,483 shops (-0.49%) in 2017.

This is a significant change from the net increase of +795 shops (+0.28%) in 2016. A net growth of +44 units in retail parks meant that this was the only location type to see an increase in the number of independent shops in 2017.

The chain retailers have also remained in decline with a net loss of -4,010 shops (-1.93%) in 2017 across GB, which compares to -2,633 shops (-1.33%) in 2016.

  • In 2017, the net change in the independent sector was -1,483 units (-0.49%) versus +795 (+0.28%) in 2016.
  • In 2017, a total of 67,503 independents either opened (33,010) or closed (34,493), +4.4% up on 2016, when 64,661 opened (32,728) or closed (31,933). This reveals that whilst numbers are down and closures are high, independent retailers are still opening stores.
  • Net change in numbers of Independent comparison goods retail (non-perishable goods including fashion, books and homeware etc) was -2.62% in 2017 (-1.50% in 2016). This is a net decrease of -2,240 units, compared to -1,210 in 2016.
  • Independent leisure (restaurants, cafes, bookmakers & entertainment etc) grew by +0.15% in 2017 compared to +0.49% in 2016. In 2017 there was a net increase of +132 units versus +410 units in 2016.
  • Independent convenience stores (bakers, butchers, food shops & supermarkets) saw a net decrease of -266 units (-0.88%) in 2017 versus an increase of +314 units (+1.13%) in 2016.
  • Independent service retail (health & beauty, financial services, tattoo parlours and estate agents) increased by the greatest number of units (+891), yet this did not match the number of openings in 2016 (+1281). In 2017, the net change in units was +0.91% compared to +1.47% in 2016.
  • Key growth sectors have been barbers, beauty salons, tobacconists/e-cigarette shops and cafes (See table 1).
  • Independent sectors in decline include newsagents, pubs, women’s clothing shops and estate agents (See table 2)
  • German restaurants (+66.67%) have increased the most as a percentage of their total units with Doner Haus opening two sites, one in Sunderland and another in Glasgow (this marks the first German restaurant in both cities).
  • The West Midlands showed the greatest increase of independents at +230 units (+1.01%) in 2017. The region also saw the greatest increase of independents in 2016 at +280 units (+1.43%).
  • Yorkshire and the Humber and Greater London showed the greatest decline of independents at -460 units (-1.58%) and -374 units (0.54%)
  • Wales was the only region to see a decrease in the number of closures in 2017 (-1,163 units) compared to 2016 (-1,328 units). However the similar decrease in the number of openings in 2017 (+1,162 units) from 2016 (+1,398 units) has meant that the overall net change is lower in 2017 (-1 unit) than it was in 2016 (+70 units).
  • Portobello Road in London has the highest percentage of independents across GB at 0% (based on locations with 50+ units), knocking Sparkhill in Birmingham from the top spot.
  • Telford is the town with the lowest percentage of independents at 9% (based on locations with 50+ units) for the second year running.
  • Wider analysis of in and out-of-town locations show that retail parks saw a significant improvement from a net decline of -3 units in 2016, to a net increase of +44 units in 2017. This represented a net increase of +7.26% in 2017 from a -0.48% decrease in 2016.
  • The other location types (high streets and shopping centres) saw a decline in the number of independent units. High streets saw a decrease of -476 units (-0.28%) and Shopping centres saw a decrease of -88 units (-1.07%). Both of these location types experienced an increase in the number of independent units in 2016; +929 units (0.58%) on the high street and +47 units (0.59%) in shopping centres.

Independents account for 65% of all retail and leisure units in Great Britain, the same as in 2016.

Top 10 independent business openings by classification mix
Classification Net Change % Units Net Change
Barbers 6.26 619
Beauty Salons 6.21 394
Tobacconists 22.01 342
Cafe & Tearoom 2.04 324
Nail Salons 6.24 176
Restaurant & Bar 6.48 172
Mobile Phones 6.35 153
Alternative & Complementary Medicines 3.74 111
Bars 2.86 110
Convenience Stores* 1.58 97

Table 1. Highest number of independent units opened by business type in 2017 across GB (Source: LDC)
*The ‘Convenience Stores’ Sub Category is within the wider ‘Convenience Retail’ classification including supermarkets and grocery stores which saw a net decrease of -266 units.

Top 10 independent business closures by classification mix
Classification Net Change % Units Net Change
Newsagents -6.16 -286
Public Houses & Inns -2.87 -281
Clothes – Women -5.96 -233
Estate Agents -1.67 -139
Restaurant – Indian -2.87 -136
Computers -5.93 -124
Electrical Goods -9.28 -119
Hairdressers -0.80 -115
Shoe Shops -8.79 -113
Florists -3.15 -97

Table 2. Highest number of units closed by business type in 2017 across GB (Source: LDC)

National and regional net variations of independents

 

Regions/Nations Net Change % Units Net Change
East Midlands -0.24 -49
East Of England -0.52 -113
Greater London -0.54 -374
North East -1.26 -140
North West 0.00 1
Scotland -0.89 -187
South East -0.38 -137
South West -0.95 -253
Wales -0.01 -1
West Midlands 1.01 230
Yorkshire and the Humber -1.58 -460

Table 3. Net percentage change (openings minus closures) of independent units by region in 2017 across GB (Source: LDC)

Top 10 independent towns (50+ units)
Towns Independent %
Portobello Road, London 95.0%
Sparkhill 94.4%
Saltley 93.2%
Barry West 92.6%
West End, Morecambe 92.2%
Goodmayes 92.0%
Narborough Road, Leicester 90.6%
Old Bexley 90.5%
Barking Road 90.4%
Conwy 90.0%

Table 4. Towns with the greatest percentage of independent retailers (Source: LDC)

Bottom 10 independent towns (+50 units)
Towns Independent %
Telford 19.9%
Yate 20.2%
Bracknell 21.7%
Cowley 26.5%
Salford 26.6%
Woodley 27.5%
Milton Keynes 27.5%
Cwmbran 28.0%
Welwyn Garden City 28.1%
Perry Barr 28.6%

Table 5. Towns with the lowest percentage of independent retailers (Source: LDC)

Change in number of independent stores by location type
2017 2016
Location Type Net Change % Units Net Change Net Change % Units Net Change
High Street -0.28 -476 0.58 929
Retail Park 7.26 44 -0.48 -3
Shopping Centre -1.07 -88 0.59 47

Table 6. Net change by location type for independents across 2,700 in and out of town GB locations (Source: LDC)

Chris Fowler, Relationship Manager at the Local Data Company commented:
“LDC’s latest figures show that independents are still incredibly important to the vitality of our high streets, accounting for 65% of all retail and leisure units in Great Britain. Yet there are signs of a considerable shift in the focus and location of independent occupiers. With the majority of sectors in growth mode having a focus on services, this reflects the transformation of retail from goods to services that we’re seeing – not just on our high streets, but increasingly in out-of-town locations, where multiples and bulky goods have previously dominated.

The independent sector is typically more agile than the multiples and these smaller businesses are adapting to rapidly changing market conditions as consumers have less attachment to products and expect ever greater convenience from services.

One example of how independents have helped fill vacant out-of-town units is Cockhedge Shopping Park in Warrington, where five openings saw the vacancy rate drop from 13.3% to 3.0% over the last two years. Almost half the occupiers are now independent, with the categories represented including health, nail bars and opticians – all of which have a strong service offer. This illustrates how flexible landlords can encourage independents to take up long term vacant units and ensure that the growing demand for certain retail services is catered for.

The need for customisation and providing a personal service will continue to fuel the openings of independents on our high streets, but the threat of closure remains high due to the marginal nature of some businesses. Yet there is evidence in the historic LDC data to suggest that once a new independent retailer has survived the first three years, they are more resilient and are actually more likely to survive than the multiples in our large towns.  So if more independents can be supported in their early years by creative landlords and other stakeholders, our towns and cities stand a greater chance of adapting to the ongoing retail revolution we are witnessing.”

Alan Hawkins, CEO, British Independent Retailers Association (bira), said:
“The figures come as no surprise, and the net loss of 1483 independents reflects the more attention-grabbing headlines covering multiples that have dominated the news for the last few months. Continued concern following the last rates review, uncertainty over Brexit, changing shopping habits, a harsh winter and real incomes falling can all be used to explain these figures. With this sector being faced with a false cost base against their online competitors we shouldn’t be surprised at these inevitable consequences. With 65% of all outlets being independents, is society really braced for the hole a decline in numbers will bring? A growth of 44 independents in retail parks whilst welcome and high in percentage terms does not redress the balance.”

Note: The total number of independent businesses covered in this research across GB was 303,130

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