ALMOST 100 shopping centres and more than 730 chain stores closed in Wales in 2020, making Wales the worst affected nation in the UK for retail closures, and the grim news is that the outlook is 'only likely to get worse'.

Research conducted by the Local Data Company, which examined the effects of the pandemic on retail across the UK has identified that the number of shopping centres in Wales dropped by 10.2 per cent in Wales (with 94 closing) compared to an average of 7.1 per cent across Britain.

And according to accountants and business analysts PwC, the situation is “only likely to get worse in 12 months’ time”.

Who has suffered most - and how badly?

The decline in shopping centres can be attributed to the fact that they're more likely to host fashion retailers and chain restaurants, both of which are in the top three most hard-hit categories for net closure. Other areas of retail have of course suffered hugely.

Last year, 738 chain stores – not including those temporarily closed due to lockdown restrictions – also closed, while just 336 opened, representing a net change in store numbers of minus four per cent.

Debenhams , Mothercare and Sir Philip Green’s Arcadia Group – which owns brands such as Topshop and Dorothy Perkins – are just some of the big names to have entered administration since the start of the pandemic.

High streets – which have suffered from a drop-off in footfall during the pandemic – and retail parks,  suffered almost equally;  down 5.1 per cent and 4.9 per cent respectively, while the number of standalone shops declined by 2 per cent.

This reduction means means that, at the end of 2020, only the North East of England had fewer retail businesses than Wales.

What next?

The findings of this research not only highlight the long-term impact of digital migration in the retail industry, as more customers shop online, but also show how devastating the full impact of the pandemic could be. Government support offered to businesses during the pandemic helped many stay afloat, but there is concern that those closed ‘temporarily’ may never re-open.

“The real impact of the pandemic is yet to be felt, ” Jason Clarke, partner in PwC’s West and Wales practice, told The National.

“Some stores ‘temporarily closed’ during lockdowns, but considered as open in the research, are unlikely to ever welcome customers again.”

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Silver linings?

But there may be some good news. While the minus four per cent net change continues the downward trend seen across Wales in recent years – with store numbers dropping year-on-year since 2016 – it is slightly less than the 4.2 per cent fall recorded in 2019.

This makes Wales the only area in the UK where there are fewer chain stores closing than in the 12 months previously, while Wales' numbers were also better than the 4.5 per cent drop seen across the rest of Britain.

The decline in larger shopping centres and chain stores may also provide a valuable opportunity for smaller, independent stores, according to analysts.

“There will be big opportunities for growth into the gaps that are emerging,” said Mr Clarke. “After the global financial crisis we saw growth of discounters and foodservice chains that replaced existing retailers.

“There is an opportunity for operators who can find the right location at the right time to thrive, even despite the current uncertainty.” 

Embracing the future - the Swansea experience

In some areas of the country, such as Swansea, the positives of such a shift in retail are clear to see. Despite the Quadrant Shopping Centre in the heart of the city losing big chains like Debenhams, Burton, Clarks and Animal since the start of the pandemic, an expansive city centre regeneration programme is cause for optimism.

“We all know our city centres and high streets are changing and it is clear that Swansea is embracing this inevitable change in a very positive way,” said Russell Greenslade, Chief Executive of Swansea Business Improvement District.

“Retailers continue to make enquiries to take up units across the city centre and viewings are going ahead, as are new business launches in Swansea, including Taco Bell, and Deichmann, most recently.

“Many of our well-established retail and hospitality firms have been using the lockdown period to refurbish, remodel and upgrade their premises and their offer, so they can give an even warmer welcome to customers when they return.”

While conceding that businesses have been bruised by the pandemic, developments such as the unveiling of new student accommodation and construction of a 3,500 seat state-of-the-art arena, are hoped to help create new opportunities for the city centre.

“There is very much the feeling that Swansea is one of the most exciting places to be at this moment in time,” added Mr Greenslade.

“We are not clinging to the old model of the high street – we are embracing the future and the opportunities it brings, as we see consumers continue to expect to use their city centres as community hubs and as places to live and to spend their recreational time rather than simply to make a fleeting visit to its shops.”

The article originally appeared on the Argus' sister site The National.