The UK is grappling with a wave of shop closures each month but retail experts warn the ‘worse is set to come’. Last year, saw shop closures surge by over a quarter, with 13,479 shutting their doors and small businesses hit the hardest, research claims.
But predictions suggest this bleak period is far from over, with the number of shops closing set to rise by nearly one third in 2025. The Centre for Retail Research (CRR) anticipates that 17,350 stores will close over the next 12 months, averaging almost 48 per day.
Joshua Bamfield, the centre’s director, expressed concern over the closure numbers, stating they were not as severe as those in 2020 and 2022, but ‘they are still disconcerting’. The closure of shops drains the vitality from many town centres, resulting in ghost towns characterised by rows of boarded-up shops.
Carpetright, which had 273 stores, was among those that collapsed last year, although 54 of its shops were taken over by rival Tapi Carpets and Floors.
The Body Shop went into administration in February, leading to the closure of 82 of its high street shops, while Homebase, which had 130 shops nationwide, went bust in November. Around half of its stores were purchased by the group behind The Range.
These worrying closure figures have been released amidst growing concerns over an impending surge in costs faced by retailers following Rachel Reeves’s Budget, reports the Express.
The British Retail Consortium (BRC) has said the Chancellor’s changes to employer National Insurance contributions – to increase the headline rate from 13.8% to 15% and to lower the threshold at which companies start to pay the tax – will cost retailers £2.3 billion.
Beyond this, a 6.7% increase to the minimum wage will add more than £2.7 billion to wage bills, the BRC said.
In a third hit, high street shops are poised for a rise in property taxes as discounts on business rates are rolled back. Altus Group, a real estate firm, states that the average shop’s rates bill will spike from £3,589 to £8,613 for the fiscal year of 2025-26.
Alex Probyn of Altus Group labelled it ‘foolhardy’ to diminish targeted relief that aimed to support smaller retailers. He said: “Despite (the Labour manifesto’s) recognition of the undue burden business rates place on our high streets, that burden will be significantly increased.”
CRR forecasts suggest that some 14,660 of the stores predicted to close this year will be smaller independent retailers. This figure is around 90% higher than the 7,793 in 2024.
A spokesman for the Treasury said: “We delivered a once-in-a-parliament Budget to wipe the slate clean and deliver the stability businesses so desperately need. Without our action, business rates relief for retail, hospitality and leisure would have ended in April this year.
“Instead, we are extending 40 percent relief for 250,000 properties and introducing a new permanently lower business rate in 2026, while more than half of employers will either see a cut or no change in their National Insurance bills.”