British high streets lose 83% of department stores in five years

Almost two thirds of closed shops remain unoccupied, study finds

The boarded-up branch of Debenhams department store on Oxford Street, London. The chain had already been struggling prior to the Covid-19 outbreak and began a liquidation process late last year. GettyShow more

Britain has lost 83 per cent of its main department stores over the past five years, in a stark reflection of the fallout from the Covid-19 pandemic and changing shopping habits.

Almost two thirds of the closed shops remain unoccupied, according to the study from commercial property information company CoStar Group, with about 237 large stores yet to be taken over by a new business.

“The data undoubtedly highlights the acceleration of change in the retail sector in recent years, which the pandemic has only exacerbated,” CoStar Group's head of analytics, Mark Stansfield, told the BBC.

The company tracked Britain’s largest department store chains, such as Debenhams, BHS, House of Fraser, John Lewis & Partners and Beales, from 2016 to the present day to assess how badly retail has been hit.

It found that while 467 department stores were open five years ago, 388 have since closed – leaving only 79.

While many remain empty, 52 have early planning approval for new projects or plans in place, according to the study that was carried out in July.

The vacancy rate for shops increased to 14.5 per cent in the second quarter of this year, up from 14.1 per cent in the previous quarter, according to the British Retail Consortium. Rates have been consistently rising since the first quarter of 2018.

Helen Dickinson, chief executive of the BRC, said the rise “comes as no surprise as retailers have been in and out of lockdown for over a year".

“While vacancy rates are rising across all retail locations, it is shopping centres, with a high proportion of fashion retailers, that have been the hardest hit by the pandemic,” Ms Dickinson said.

“Almost one in five shopping centre units now lie empty, and more than one in eight units have been empty for more than a year. Retail parks have also been impacted from the loss of anchor stores and their vacancy rate is rising quickly.”

Department stores have long been key destinations on Britain’s high streets, but the coronavirus pandemic accelerated the number of casualties after retailers suffered their worst annual performance on record in 2020.

It follows an already difficult time for the sector, with department stores struggling with the switch to online shopping and changing consumer tastes.

BHS closed its doors for the final time in August 2016, ending an 88-year presence on the High Street, after the retailer was placed into administration and failed to secure a buyer.

Retailer Debenhams closed its doors for good in May, after 243 years of trading in British towns and cities.

The struggling department store chain, founded in London in 1778, started a liquidation process last December after Covid-19 lockdowns dealt a final blow to its finances.

House of Fraser also took a hit, cutting back its store numbers by about a quarter in response to the switch to online shopping. Even industry stalwart John Lewis has been forced to make job cuts and store closures in recent months.

The closures have contributed to the overall devastation in Britain’s retail sector, which has been hit by a series of lengthy lockdowns during the Covid crisis that forced non-essential retailers to shut up shop.

While many turned to virtual services, the lack of walk-in customers has seen major fashion retailers such as Oasis, Warehouse, Topshop and Gap – which in July said it would close all its 81 UK stores in the UK and Ireland by the end of the year and go online-only – disappear from high streets across the UK.

The closures have left huge holes on high streets across the country. Wander through the town centre in Southend-on-Sea in Essex, south-east England, and 17 shops stand vacant, including a former Debenhams outlet.

The CoStar study said some real estate owners are looking to transform key locations where department stores once stood into hotels or office spaces.

But filling so many gaps is a challenge, with all of Debenhams stores still currently vacant.

Ms Dickinson warned that the vacancy rate could rise further now the Covid-19 business rates holiday has come to an end.

“The government must ensure the ongoing business rates review leads to reform of this broken system, delivering on its commitment to permanently reduce the cost burden to sustainable levels,” she said.

“The longer the current system persists, the more jobs losses and vacant shops we will see, hurting staff, customers and communities up and down the country.”

Even luxury department store Selfridges is up for sale, after its owners, Canada’s Weston family, launched a formal auction to sell the business late last month.

Assets up for grabs including Selfridge’s four stores in the UK – in London, Manchester and Birmingham – along with Brown Thomas and Arnotts in Ireland and De Bijenkorf in the Netherlands.