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The retail sector is going through a prolonged period of upheaval – the Centre for Retail Research have described the industry as undergoing a “permacrisis” since the 2008 financial crash.

Factors such as changing consumer behaviour, increased internet shopping and challenging economic conditions are changing the way retailers operate and engage with their customers. The coronavirus pandemic and increased cost of living have added to these challenges and accelerated trends such as increased online shopping and closures of retail premises.

This briefing paper describes the current state of the retail sector in the UK using data and recent reports on the industry. Sometimes due to data availability, data refers to Great Britain only. This briefing covers the retail sector only (not the wholesale sector) and does not provide information on government policy in the retail sector.

Key figures

  • Retail sector economic output was £110.3 billion in 2022, 5.0% of the UK’s total economic output and a 4.2% increase on 2021.
  • There were 2.7 million jobs in the retail sector in 2022.
  • There were 314,040 retail businesses as of 1 January 2023.

In 2023, retail sales in the Great Britain were worth £510 billion, an increase of 3% on 2022.

For every pound spent in 2023:

  • 40 pence was spent in food shops – a 9% rise on 2022.
  • 11 pence was spent in clothing shops (including textiles and footwear) – an increase of 7% on 2022.
  • 9 pence was spent on automotive fuel – a fall of 12% on 2022.
  • 7 pence was spent in household goods shops (including electronics and furniture stores) – a fall of 1% on 2022.

Impact of the pandemic on retail sales

At the onset of the Covid-19 pandemic in March 2020, retail sales fell dramatically as lockdown restrictions closed non-essential retail stores. Trends in retail sales were erratic for the remainder of 2020 and 2021, though overall, broadly returned to pre-pandemic levels from March 2021. Since August 2022, retail sales have generally fallen back below pre-pandemic levels, with the exception of sales in household goods stores, which have remained above pre-pandemic levels.

Internet sales

Internet sales have been rising since 2008 (when ONS data began) reaching around 20% of all retail sales in Great Britain in 2019. Online sales rose sharply at the onset of the pandemic as physical stores were closed, reaching a record high of 37% in February 2021. Internet sales as a proportion of all retail sales have generally fallen since February 2021, though remain above pre-pandemic levels. Internet retailing is more popular in the UK than other European countries and the USA.

Store closures

Figures from the Centre for Retail Research indicate the number of stores closures in 2023 was 971, the lowest number of store closures since 2015, though this was a result of 62 retail businesses failing, the highest number since the Centre for Retail Research began collating this data in 2007.

Data from the Local Data Company indicates that the rate of vacant retail units increased steadily in 2020 and 2021, from 12.2% in Q1 2020 to a high of 14.5% in Q2 and Q3 2021. While vacancy rates fell in five successive quarters following Q3 2021, they remain above pre-pandemic levels.


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