Figures from the Centre for Retail Research (CRR) reveal extensive retail closures in the UK, with over 17,000 retail sites shut up shop in 2022.
This presents the highest number of closures in five years, with total closures up 50% from 2021 figures.
To put this figure in context, the CRR highlights that the rate of retail closures in 2022 was up to a staggering 47 sites per day.
Of these closures, 11,090 shops were closed by independent business owners, whilst an additional 6,055 shops were shut down by larger retail chains.
As businesses sought to cut costs and closed down, retail jobs also saw a stark decline with 150,000 posts closed.
UK Retail versus COVID-19
Much of the impact on the British retail sector in 2022 has been belated, following the global COVID pandemic.
Albeit high street retail sales were decimated for most of 2020 and 2021, many shops – and employment positions – were temporarily insulated from the full force of COVID.
Bounceback loans and the furlough scheme enabled businesses to pay wages and bills when revenue was low, or in some cases, non-existent.
However, as the prevalence of COVID-19 infections dissipated across 2022, so did the availability of governmental financial support for businesses.
Moreover, last year saw inflation rise sharply, driving up prices – an increase in costs that retailers were forced to pass onto their consumers.
At the same time, the UK – like many other countries – entered into a cost-of-living crisis.
As energy prices skyrocketed, the result of Russia’s invasion of Ukraine, and the inflationary impact on goods and services were felt by all, consumers across the country tightened their belts and reduced much non-essential spending.
What Next for UK Retail in 2023?
There’s no hiding from the fact that the UK economic outlook for 2023 is of concern for small business owners.
It is hoped that retail closure figures will decline from last year’s; however, much of this will depend on the availability of funding for UK businesses.
The Federation for Small Businesses (FSB) recently announced that UK SMEs are being grossly underserved by banks and traditional financial institutions, with under half of business loan applications approved.
In this, the FSB has called on the British Business Bank to utilise the government’s bank referral scheme, which provides details of SMEs turned away for financing, so that alternative lenders are able to provide small businesses with funding where banks have left them high and dry.
Small businesses access unsecured, fast funding from Got Capital. As an alternative lender, Got Capital offers financing solutions specifically designed for and catered to the needs of SMEs.
