The online retailers that boomed in the UK during the pandemic have suffered a significant shakeout since the government eased Covid-19 restrictions, new figures show.
The number of retail firms shutting down rose 40% from a year ago in the second quarter, the Office for National Statistics said Thursday. The surge was the main factor behind an 8% increase in total business closures.
“Retail sale via mail order or via internet and other retail sale not in stores, stalls or markets are the two main industries contributing to the increase in closures within retail,” the ONS said Thursday. “These closures follow significant increases in creations during the second half of 2020 and the first half of 2021.”
Non-store retailers sprouted when lockdown curbs closed premises and the fear of contracting Covid-19 kept many people at home. However, the reopening of the economy a year ago has seen shoppers return to high streets and spend less online.
The ONS data show the number of business removed from or added to a government register of operating enterprises. A firm is taken off the Inter-Departmental Business Register if its turnover and employment are zero for several periods, or if the ONS is made aware that the business has ceased trading.
The number of firms removed was 113,700 in the second quarter, the highest figure for the period since the series began in 2017. Ten out of 16 main industrial groups recorded an increase.
Firms closing had an average of 2.3 employees, fewer than before the pandemic. “However, the trend towards increasingly smaller businesses closing may be ending,” the ONS said.