The decline of high streets in Britain is accelerating, largely due to a significant wave of bank branch closures, according to a recent report by PwC. Over the past two years, nearly 1,000 bank branches have shut down, prompting consumers to either travel further or rely on digital banking services. This shift is taking a toll on local economies, with 10 retail or hospitality businesses disappearing each day in 2024, as highlighted by Green Street’s analysis for PwC.

Impact of Bank Closures on Retail

A key contributor to the diminishing foot traffic on high streets is the drastic reduction in bank branches. Kien Tan, a senior retail adviser at PwC, noted that “the number of banks has halved in the last decade, which is a substantial change.” This trend has created a ripple effect, adversely affecting local businesses that depend on customer visits.

• Banco Santander has announced plans to close 95 branches in the UK, putting around 750 jobs at risk.
• Similarly, Lloyds Banking Group and NatWest Group have downsized their physical presence, facing fierce competition from online banking platforms like Monzo and Revolut.

Retail Sector Under Pressure

The situation for retailers is dire, with net closures of 1,795 outlets recorded in 2021 and 2022, a trend that includes building societies, insurance agents, and credit unions. The ongoing struggles within the British retail landscape are becoming increasingly problematic for the government. Following Chancellor of the Exchequer Rachel Reeves’ recent budget, which introduced higher operational costs, the opposition has criticized her for undermining business and consumer confidence—threatening the Labour Party’s growth agenda.

In total, 12,804 chain outlets closed in British shopping areas in 2024, although this represents a slight improvement over 2023. Experts at PwC anticipate continued store closures as businesses brace for increased national insurance contributions starting next month.

Challenges Ahead for Retailers

“Retailers will continue to encounter formidable obstacles in 2025,” warned Zelf Hussain, a restructuring partner at PwC. With payroll costs rising and business rates going up in April, profit margins will likely remain tight, putting further strain on high street businesses.

The decline isn’t limited to banks; pubs and pharmacies have also felt the impact. Boots announced plans to close 300 stores in the UK, while Lloyds Pharmacy confirmed it would exit the high street later this year. This trend has political ramifications as the government tries to shift more health services to pharmacies amid challenges faced by the NHS.

The PwC report, released on Thursday, analyzed over 200,000 chain outlets across 3,500 locations in Great Britain, illustrating the evolving nature of high streets, shopping centers, and retail parks. Notably, this data does not account for independent shops, which also face their own set of challenges.

As the landscape of British retail continues to change dramatically, the future of high streets hangs in the balance, prompting questions about how communities can adapt to these transformations.