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Independent retail market remains resilient in 2020 due to government support schemes
Date published: Date modified: 2023-08-16

Despite the COVID-19 pandemic causing mass closures across the GB retail and leisure landscape, there were still 31,405 openings of independent units in 2020 according to a new report released today by retail data consultancy, Local Data Company. Openings were just outweighed by 32,847 closures and resulted in the independent market shrinking by -0.4% (-1,442 units). However, this loss was minimal compared to the chain market which declined by -4.5%, equating to a loss of -9,877 units.

The loss in independent units in 2020 was slightly lower than the previous year, with a net change of -1,521 units (-0.5%) in 2019. This reflects how resilient the independent market has been; despite the remarkably challenging trading environment for all retail and leisure operators, there were still entrepreneurs able to launch new businesses.

Both independent openings and closures decreased by 11% in 2020, as extended periods of lockdown suppressed market activity. The decrease in closures indicates that government support schemes designed to stem the flow of retail and leisure closures during the pandemic were more effective for the independent sector than chains. (for more information on the performance of the multiple market see the LDC/PwC openings and closures report at https://www.pwc.co.uk/industries/retail-consumer/insights/store-openings-and-closures.html).

Openings, closures and net change of independent units 2015 - 2020

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Figure 1: Openings, closures and net change in independent units 2015 - 2020 (Source: Local Data Company)

Many chain brands launched or accelerated store rationalisation programmes in 2020, whereas independent businesses hunkered down and relied on support schemes such as furloughing staff and business rates relief to help them survive. Through the pandemic, localisation has been a key trend; with consumers confined to their local area, many have chosen to support independent businesses due to an increased sense of community.

 

WHAT TYPES OF INDEPENDENT BUSINESSES HAVE BEEN OPENING?

Independent barber shops continued to open at pace (See Figure 2), as has been the case since 2017, spurred on by the demand for haircuts in between long periods of lockdown. Barbers are also a popular choice for entrepreneurs due to the low set up costs for this type of business. New entrants on the top 10 opening list for 2020 were Fast Food Takeaway, Grocers, Pizza takeaway and Restaurants as demand for food delivery and grocery items skyrocketed.

TOP 10 INDEPENDENT RETAIL CATEGORIES TO OPEN IN 2020

Figure 2 press release

Figure 2: Top 10 independent retail categories to open in 2020. (Source: Local Data Company).

A rapidly changing market

 Analysis on how many independent stores that opened in 2018 were still operational on 1st March 2021 demonstrates how fragile this market can be, with just 64% of those businesses still open, around two years on. The percentage of independent units that were able to survive for the two-year period also varies by region from as low as 54% in the North East, to 72% in the East of England with 84% of independents in the city of Cambridge able to survive the course.

Commentary from Lucy Stainton, Head of Retail and Strategic Partnerships at the Local Data Company:

“Whilst the latest statistics do show that structural decline across the retail and leisure market picked up pace in 2020, it is clear that we are not yet seeing the full impact of the pandemic. The number of permanent closures recorded was lower than the previous year as a result of government interventions, yet a significant number of dormant businesses are still ‘temporarily closed’ following the first lockdown. It remains to be seen if these will re-open at all once restrictions are lifted.

The volume of activity we are seeing across the independent sector could be cause for some optimism however, as an increase in available retail units and more localised shopping habits create opportunities for those looking to open a business. This could mark a first step towards more diverse and resilient high streets across the country.”

ENDS

For more information please contact the LDC press office at press@localdatacompany.com 

 


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