The coronavirus has had a huge impact on the retail sector, with closures and restrictions proving to be the final nail in the coffin for some businesses trying to survive on an already struggling high street.
Across the UK retail sector, this has led to store closures or, in the worst case scenario, insolvencies.
Newcastle is one of the regions that has borne the brunt of the pandemic’s impact on retail, according to new research from Wholesale Clearance.
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The company found that Newcastle is the second worst-hit area for retail liquidations during Covid-19, with 33 insolvencies filed between March 2020 and September 2021.
This means that 3.36 businesses have closed out of 100 in the city.
Norwich ranked number one for the most businesses to file for insolvency over the same period, with 8.27 businesses closing out of 100 and a total of 49 insolvencies.
The pronounced impact of the pandemic on the retail sector is believed to be the result of several lockdown restrictions throughout 2020 and 2021, as well as the ongoing opening and closing that many non-essential stores have had to face during the tier system of government.
Karl Baxter, managing director of Wholesale Clearance, said shoppers need to support local businesses and the high street to avoid further closures.
“It’s disheartening to see the number of retail and wholesale businesses affected by the Covid-19 pandemic,” he said.
“With strict lockdowns forcing temporary closures and subsequent changes to guidelines, it has undoubtedly devastated a once thriving industry and struck fear into once confident shoppers.”
Despite the grim numbers, Newcastle City Council said attendance statistics indicate the city is starting to rebound.
A council spokesperson said: “Covid and lockdown restrictions have had a severe impact on business – not just in Newcastle but across the UK.
“However, footfall statistics indicate that Newcastle are beginning to rebound, and we expect trade to resume in bars and restaurants as restrictions ease.
“Employment in the city has increased significantly, reaching an all-time high of nearly 150,000 in the year to June 2021 – an increase of more than 30,000 jobs over the past decade.
“In the last quarter of 2021, more than 14,000 new opportunities were advertised for jobs in IT consulting, healthcare, catering and construction.
“We’ve also seen very strong growth in other sectors such as digital, business services, and health and life science businesses.
“This, alongside HMRC’s decision to create 9,000 jobs in the town center and the development of key development sites such as Helix and Stephenson Quarter, will help boost midweek footfall in shops, bars and the restaurants.
“In response to changing shopping habits, we have developed a clear ambition through the City Center Transformation Program with a vision to make the city center cleaner, greener and more attractive for tourism, business and investment, where local people find jobs and new opportunities.
“We strive to attract foreign investment in key strategic sectors and support local businesses by working to link demand for skills with supply through our reskilling and upskilling programmes.
“Newcastle had a vibrant economy before the pandemic, and we’re confident we’re starting to see the green shoots of a recovery.”
Newcastle’s Eldon Square shopping center also reported that footfall was starting to pick up as shoppers regained confidence to return to shops.
Bernice Nesham, Senior Asset Manager at Catella APAM for Eldon Square, said: “Eldon Square and its retailers had a busy 2021, with eight new stores opening before Christmas, supporting 33 new jobs in the town.
“The Christmas shopping period saw an 85% increase in attendance compared to 2020 and attendance for the year was +11% compared to 2020.
“We expect this growth to continue in 2022 as more people return to the city center for work and play.
“Since taking over asset management from Eldon Square in October 2020, APAM has leased 12 units with eight more under offer, while retaining a further 30 tenants.
“All of this has contributed to Newcastle’s job security and economic recovery.”
Eldon Square is also set to welcome two new businesses to the mall in the coming weeks – Swatch and The Real Greek Restaurant.
Bernice continued, “We look forward to sharing our exciting plans for 2022, which we are confident will continue to help our retailers, our restaurants and our city thrive.”
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