A record number of stores are expected to close their doors this year, with rising business rates cited as the final blow for many retailers.
According to new figures from the Center for Retail Research, store closures could reach 17,349 in 2025, up from the 17,145 recorded in 2022 when pandemic support measures were scaled back.
Last year, 13,479 stores ceased operations – a 28 percent increase from 2023 – with household names among the victims. Carpetright, which once operated 273 stores, went under, although competitor Tapi Carpets & Floors took over 54 of its locations. The Body Shop went into administration in February, closing 82 stores on the high street, while the demise of Homebase in November saw half of its 130 branches closed, with the other half rescued by the owners of The Range.
In 2024, an average of 37 stores closed every day, making what the Center for Retail Research called “another brutal year for the retail sector.” Many executives fear 2025 will be even tougher due to a looming rise in corporate interest rates, which takes effect in April.
Chancellor Rachel Reeves has announced a reduction in the business rates cut from 75 per cent to 40 per cent for retailers, leisure and hospitality businesses. According to Altus Group, this will result in average retail rates more than doubling, from £3,589 to £8,613 in the next tax year.
Alex Probyn, chairman of property tax at Altus, warns that cutting support “after a difficult year for many retailers, especially independent retailers, is reckless” and insists the increase is at odds with Labor’s pledge to reduce overall rates pressure to reduce.
Smaller businesses remain the hardest hit by the crisis, accounting for eight in ten closures last year. The Center for Retail Research expects that 14,660 of the projected 17,349 closures in 2025 will come from independents.
It’s not all bad news, however. The Co-op plans to break the downward trend by opening 75 new convenience stores by 2025. Yet the latest figures from Sensormatic suggest that footfall in UK stores fell by 11.4 percent in the last full week before Christmas, compared to the same period. in 2023. Diane Wehrle, founder of retail analytics group Rendle Intelligence, puts the slow festive footfall down to consumers’ “lack of confidence around the economy” and stormy weather deterring people from heading out.