Britain’s high streets have been warned there is ‘worse to come’ this year after more than 13,000 shops closed their doors for good in 2024 – an increase of 28 per cent on the year before.
And in a gloomy report that raises fresh doubts about Labour‘s handling of the economy, industry experts predicted that 17,350 shops will shut down in 2025.
It is the highest figure since the Centre for Retail Research (CRR), which compiled the report, began collecting the data in 2015 and follows the closure of 13,479 stores last year.
The vast majority of closed shops in 2024 – 11,341 – were independent retailers, a 45.5 per cent jump against the previous year.
Firms are set to be battered by Chancellor Rachel Reeves‘ plans to hike National Insurance contributions and implement an inflation-busting increase in the minimum wage from April.
Retailers have also begged the government to reform the hated business rates system, a levy based on the rental value of a commercial property which means shops pay a premium compared with online giants such as Amazon.
The sector is already struggling as the cost-of-living crisis forces shoppers to tighten their belts.
But the looming tax raid and a reduction in business rates relief is expected to deal another hammer blow to retailers across the UK.
Boarded-up shops in Blackpool as more than 13,000 stores closed their doors for good in 2024
Rows of boarded-up shops line the high street in Waterlooville, Hampshire
Store closure figures were compiled by industry experts at the Centre for Retail Research
Business leaders have called for the Chancellor to ‘urgently’ change course with her tax-raising policies to prevent British high streets from becoming ghost towns.
The CRR’s forecast of 17,350 store closures would make 2025 worse than 2022, when the withdrawal of government support measures following the pandemic caused 17,151 shops to close.
Around 16,145 stores shut their doors at the height of lockdown in 2020.
Professor Joshua Bamfield, director of the CRR said: ‘Whilst the results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022, they are still disconcerting, with worse to come in 2025.’
Of the predicted 2025 figure, the vast majority of store closures, 14,660, are expected to be independent retailers.
These firms usually operate on very tight profit margins and may not have enough cash to cover the cost of the Treasury’s tax raid and minimum wage hikes.
‘This is a tragic scenario that we warned the government could come to pass if they did not change course,’ said Andrew Goodacre, head of the British Independent Retailers Association.
He added: ‘Overall costs for independent retailers are going up and the planned increases in National Insurance, minimum wage and business rates will leave many with no choice but to shut up shop.’
| Administration | Rationalisation | Totals | |
|---|---|---|---|
| Multiples: stores closed | 918 | 1,220 | 2,138 |
| Independents: store closures | 6,619 | 4,722 | 11,341 |
| Total stores closed | 7,537 | 5,942 | 13,479 |
| Source: Centre for Retail Research | |||
Boarded-up shops in Reading. Experts have predicted that 17,350 shops will shut down in 2025
Pedestrians pass boarded-up shops in Hastings, East Sussex, in March last year
Andrew Griffith, shadow business secretary, warned that retailers were facing a ‘January of discontent’ as a result of Labour’s handling of the economy.
‘The triple whammy of trash-talking confidence, the ‘jobs tax’ NI hike and increased business rates shows Labour just don’t understand business and wealth creators,’ he said.
Ms Reeves declared in October that employers would pay a 15 per cent National Insurance rate on staff salaries exceeding £5,000 from April rather than the current 13.8 per cent levy on wages above £9,100.
She also said the National Living Wage would go up by 77p to £12.21 per hour, alongside increases in the capital gains tax rates on selling business assets.
Retailers have been among those leading the charge against the Chancellor’s punishing tax measures.
In November, more than 80 bosses signed an open letter to Reeves warning that her Budget plans would force them to hike prices, cut jobs and close stores.
Signatories included the heads of high street giants Marks & Spencer, Next and John Lewis as well as the major supermarkets such as Tesco, Sainsbury’s, Morrisons and Asda.
Meanwhile, firms have called for ministers to reform the business rates system to make physical shops more competitive with their online counterparts.
Firms are set to be battered by Chancellor Rachel Reeves’ plans to hike National Insurance contributions and implement an inflation-busting increase in the minimum wage from April
Before the Budget, bosses had called on the Chancellor to extend Covid-era relief schemes which cut their business rates bills by 75 per cent.
But instead, rates relief for hospitality and retail businesses was cut to 40 per cent.
Commercial property firm Altus Group estimated that as a result of the discount being cut to 40 per cent from 75 per cent the average shop’s business rates bill would spiral from £3,589 to £8,613 for the 2025 to 2026 tax year.
Altus president Alex Probyn said Labour’s decision to scale back the relief was ‘foolhardy’ and would hit small retailers hard.
‘Despite Labour’s manifesto recognition of the undue burden business rates place on our high streets, that burden will be significantly increased,’ he added.
Predictions of widespread shop closures follow a warning from insolvency experts Begbies Traynor last week that the number of UK retailers in ‘critical financial distress’ had surged in the final three months of 2024.
It blamed the ‘compounding pressures’ of low seasonal demand, rising costs and consumer confidence sliding after the October Budget.
Helen Dickinson, chief executive of industry body the British Retail Consortium (BRC), said: ‘2025 looks to be challenging for the retail industry, with high costs and weak consumer confidence going into the new year.
‘Retailers will be looking at the £7 billion in new costs from the Budget facing the industry this year with increased concern.’
She added that the new levies would ‘heap pressure’ on the industry and that many firms would ‘have no choice but to raise prices or cut costs by closing stores.’
