What’s really killing the UK high street and how shops can survive it

Britain’s high streets are hollowing out. Empty shopfronts line once-busy stretches, and “To Let” signs have become an all-too-familiar sight. But behind the boarded-up windows is a deeper economic story, one that paint and pop-ups can’t fix.

According to The Guardian, a recent analysis from the Centre for Cities showed that reviving the UK’s struggling high streets could require as much as £5 billion in targeted investment. And the core issue, they argue, is economic, not just cosmetic.

The decline is visible, but its causes are often not. In 2024 alone, 12,804 chain stores closed their doors, approximately 35 every day, according to PwC data. But that headline figure masks the real pressure points. Soaring costs, poor policy decisions, and hidden financial drains are steadily eating away at the retail business model. For many shop owners, staying open on the high street simply no longer adds up.

Why UK high street shops are closing faster than ever

The decline of the UK’s high streets is not just about the odd shop shutting down. It’s a national trend with deep economic roots. A recent Centre for Cities study reveals that struggling towns like Bradford, Newport and Blackpool now have twice the number of empty shops compared to London. Vacancy rates in these areas are over 16%, while wealthier places average just 7.4%.

The situation isn’t just cosmetic, it’s structural. PwC reports that 12,804 chain stores shut their doors in 2024, while only 9,125 new ones opened. That’s a net loss for local economies. And the outlook for independent retailers is even bleaker. Around 132,945 local high street shops could disappear over the next 15 years, particularly clothing outlets, appliance shops, furniture stores, newsagents, and shoe retailers.

Worryingly, the pace of closures is speeding up. Store closures jumped 28% year-over-year in 2024. Independent retailers were hit hardest, making up 84.1% of all closures, up from 74.5% in the last year. Names like WHSmith (17 closures), Co-op (19 food store closures), and Monki (shut all 7 UK stores) showcase that this trend is affecting both big and small businesses.

Where you are also matters. In places like London, Edinburgh and York, people spend about £1 in every £4 on eating out and leisure, making it easier for local businesses to pivot from retail to hospitality. But in towns like Bradford or Wigan, it’s closer to £1 in every £10, which makes this kind of transformation much harder.

Why big brands and banks are leaving the high street too

It’s not just small shops struggling; major brands and banks are rethinking their high street presence as well.

Sainsbury’s recently cut 3,000 jobs after shutting all its in-store cafés, patisseries, pizza counters, and hot food sections. The idea of turning supermarkets into destination food hubs is being rolled back. They're returning to basics, just groceries, a sign that even the largest players are under pressure to cut costs and simplify operations.

Banks are pulling out even faster. Santander shut 95 branches in one move, nearly a sixth of its UK sites. NatWest has closed almost 1,400 high street locations over the last decade. These branches weren’t just for banking, they acted as anchor tenants that drove foot traffic for surrounding shops. When they close, the local retail ecosystem takes a direct hit.

Independent retailers in vulnerable categories are especially at risk. According to Simply Business, shops selling electrical goods, furniture, shoes, watches, jewellery, and computers are among the most endangered. These businesses rely on in-person browsing and expert advice, services that online retailers can’t fully replace. But the economics of staying on the high street no longer stack up.

Why retail parks are thriving while high streets struggle

One of the most overlooked aspects of the high street crisis is that not all retail locations are performing the same, far from it. Retail parks have been consistently outperforming both high streets and shopping centres.

According to PwC data, retail parks were the top-performing location type in nearly every month of 2024. They’ve seen just a 3% drop in outlets compared to pre-pandemic levels. In contrast, shopping centres are down by 25% and high streets have fallen by 30%.

This shift isn’t just about regional wealth. PwC’s analysis shows that since the pandemic, regional differences have nearly disappeared, with most UK regions now within two percentage points of the national average. What matters more is the type of location and what it offers.

Retail parks have clear advantages:

• Free, easy parking
• Better accessibility for cars and families
• Larger retail spaces
• Co-located leisure options, like food or entertainment
• Single ownership or management structures, making updates easier

Meanwhile, high streets are held back by older layouts, limited parking, and fragmented ownership that make coordinated improvement nearly impossible.

This change reflects how today’s consumers shop; they want convenience, quick access, and a mix of services in one trip. Retail parks are delivering on those needs. High streets, for the most part, aren’t.

Why policy changes are making life harder for retailers

Some government policies designed to support the high street are unintentionally doing more harm than good. A clear example is the April 2025 cut to business rates relief. Retailers that once received a 75% discount now get just 40%. For a shop that previously paid £8,000 annually, that’s nearly £3,000 in extra tax, a massive hit in an industry where profit margins average just 7%.

But even this isn’t the full picture. Research from the Centre for Cities shows that many of the most struggling retail properties already pay little or no business rates. So tweaking the system doesn’t help areas where the real issue is oversupply, there are simply too many shops for the level of local demand. That means retailers are competing for a slice of consumer spending that’s too small to go around.

Other cost pressures are piling on, too. In April 2025, the National Living Wage increased by 6.7% to £12.21 an hour. At the same time, changes to employment law made zero-hour contracts illegal, raising employer National Insurance costs and removing staffing flexibility for small shops trying to adapt to fluctuating footfall.

And while some sectors, like coffee shops and convenience stores, are still growing, many others are struggling. According to PwC, half of all net closures are in just four categories: pharmacies, pubs and bars, banks, and automotive-related shops. These are long-term structural changes, not short-term disruptions. The rules are changing, and many retailers are getting left behind.

Why card fees are costing UK shops more than you think

While energy bills and business rates get a lot of airtime, many small shop owners are also losing money to something much less visible, card payment fees. Industry data shows that small retailers often pay between 1.5% and 3.5% per transaction in processing charges. But under current UK rules, most shops can’t add a surcharge to pass that cost onto the customer - at least not explicitly..

And with more shoppers going cashless, the problem is only getting worse. Contactless is now the most popular in-store payment method, while cash use is at an all-time low. Consumers love the convenience, but for businesses, this shift means a bigger chunk of revenue is going to payment providers, not staying in the till.

The numbers add up quickly. A typical shop processing £10,000 a week in card payments at a 2.5% rate is paying around £13,000 a year in fees. That could cover several months of rent or the salary of a part-time team member. Larger retailers often get lower rates, but independents usually pay more, with fees eating up 3% to 5% of their sales in some cases. And that’s a percentage of sales revenue. As a proportion of margin, it’s close to 20% for small businesses..

It’s not just the fees. Modern retail POS systems are expected to do a lot more than take payments. From managing inventory and customer data to handling loyalty schemes and multiple payment types, today’s systems carry higher tech costs and often come with monthly subscription fees.

Some types of retail are hit even harder. Stores selling higher-risk items (like luxury goods), with seasonal peaks or higher return rates, often pay higher processing rates. That means fees go up precisely when a business is most vulnerable during lean months or periods of low cash flow.

And unlike other costs, processing fees are deducted instantly. Every sale takes a small slice out of your working capital, reducing what is available for restocking, marketing, or making improvements. For many small retailers, it's death by a thousand cuts, with card fees quietly undermining their ability to stay open.

The hidden costs piling up on UK high street retailers

The crisis facing Britain’s high streets isn’t caused by one big issue; it’s the result of many smaller pressures building up at the same time. It’s not just rent, or just energy bills, or just fewer shoppers, it’s all of them, together. And for many shop owners, that’s what makes it unmanageable.

Research from the Centre for Cities makes it clear: struggling high streets are a symptom of a wider economic problem, not the cause. That means we need to look beyond quick fixes. The entire model of how and where people shop is shifting, and policies need to reflect that.

Online shopping continues to pull customers away from local shops. PwC data shows that the drop in in-store chain stores mirrors the rise in online shopping almost exactly. Store numbers are falling at around 3% a year, the same pace as the decline in in-person retail activity.

Even in 2025, footfall is still 15% to 20% lower than before the pandemic, and it hasn’t recovered. That means the shops that are still open need to generate more money from every sale just to break even. But there is a catch: higher-value sales often come with higher processing fees, so even selling more doesn’t always help your bottom line.

On top of this, crime and antisocial behaviour are adding even more hidden costs. Many retailers are now facing extra expenses for security, insurance, or replacing stolen or damaged stock. For small, independent shops without the capital to install CCTV or security shutters, it’s one more financial burden.

The kind of location also matters. While retail parks have bounced back to near pre-pandemic levels (just 3% down), high streets have lost 30% of their stores. Shopping centres are somewhere in the middle, with a 25% drop. This shows that the structure of a retail site, parking, access and store layout play a bigger role than the region itself.

Shops on traditional high streets are still trying to operate in environments designed for the 1980s, while customers are living in 2025. And unless structural changes are made to match how people actually shop today, more closures are likely.

How small retailers can use technology to cut costs and boost profits

The challenges facing the high street are serious, but technology can offer a way forward if it’s used wisely. For many independent shop owners, the right tools are no longer just a nice-to-have; they’re essential for staying competitive without breaking the bank.

Online payment systems now come with much more than just transaction processing. The best platforms offer features like inventory tracking, loyalty programmes, customer analytics, and even payroll tools. Used well, they don’t just streamline operations; they also help improve profit margins.

For example, Wonderful offers transparent, low-cost payment processing built specifically for small businesses. Its pricing makes it easier to track what you’re paying and why. That kind of cost clarity can help you spot where money’s being lost and tighten your margins.

Many independent shops also turn to Square for its flexible tech and clear pricing. It works well in all kinds of settings, from small boutiques to mobile stalls. Its all-in-one tools are built with independent retailers in mind, helping you stay lean and efficient without needing a full IT team to set up.

Some POS systems now go further, offering insights that can actually help grow your business. Observing which products are more popular during specific periods and tracking customer loyalty patterns can make the difference between barely surviving and thriving. However, it’s crucial to compare total cost, not just processing rates. Monthly fees can add up, so only pay for features you’ll really use.

There are also practical ways to reduce payment costs. Some shops use cash incentive programmes to gently encourage customers to pay in cash, which can cut down card fees and boost cash flow. Just be careful not to violate UK surcharging rules.

A hybrid approach can also help, like offering self-service checkouts or mobile payments that save on staff time without impacting service. These setups aren’t perfect for every business, but for the right type of store, they can help you meet customer expectations without inflating your overheads.

The key takeaway? Technology won’t save your business on its own. But if you choose the right tools and weigh the full cost against the benefits, it can give you an advantage when every percentage point matters.

Practical ways to revive high street shops and grow local spending

Short-term fixes won't save Britain's high streets. According to the Centre for Cities, what’s needed is real, long-term economic growth, not surface-level improvements like fresh signage or empty shop beautification. The focus should be on boosting local spending power by bringing more people and higher-paying jobs into town centres.

One of the most effective strategies is mixed-use development. That means creating town centres where people live, work, and shop, not just visit occasionally. When residential, retail, and office spaces are combined in the same area, it brings more consistent footfall across different times of day and week. But this kind of planning needs cooperation from local councils, developers, and retailers working together; it’s not something any one shop can solve on its own.

For retailers looking to survive the current crisis, the first step is a full cost audit. Many shops are locked into outdated card payment contracts or paying too much for utilities and insurance. Reviewing these agreements, especially payment processing, can save thousands per year. Some businesses haven't checked their rates in years and may be paying well above the going rate.

Independent shops often lack bargaining power, but help is available. Organisations like the Federation of Small Businesses now offer group deals for card processing, energy, and insurance. These deals allow small shops to access lower prices, typically reserved for big chains.This is a good example of how working together can level the playing field.

Customer support also plays a key role. Most shoppers don’t realise how much small businesses lose to processing fees or overheads. When made aware, many customers are happy to pay in cash, sign up for loyalty programmes, or make a conscious effort to spend more locally. Even small changes in shopping habits can help shops stay open.

The bottom line? Reviving the high street will take more than fresh paint and pop-ups. This requires deep economic change, smarter cost control, and better collaboration among businesses, councils, and communities. And it starts with each shop knowing its numbers and its neighbours.

What the future holds for independent high street shops in the UK

The decline of Britain's high streets isn’t just a retail issue; it's a shift in how communities access goods, services, and social connection. According to the Centre for Cities, any real plan to revive high streets must tackle the core economic challenges rather than just improve appearances.

For independent retailers, the business maths no longer adds up. Transaction fees are just one part of a growing cost burden that also includes energy bills, business rates, rising wages, and compliance requirements. Surviving this environment requires full visibility of every outgoing cost, especially the hidden ones.

Technology can offer solutions, but only if the return justifies the cost. The most useful payment systems for small businesses are the ones that do more than just process transactions. They help manage inventory, understand customer habits, and control overheads, all while keeping costs predictable. Used well, they give small shops an edge that scale alone can't match.

Britain now faces a choice: act quickly to ease the cost pressures squeezing independent shops, or watch local economies hollow out even further. With 35 shops closing per day, inaction is not a neutral stance; it's a decision with consequences.

The future of British retail depends on recognising that small shops face different pressures from national chains. Business rates and card processing fees may seem small in isolation, but together they’re pushing many viable businesses to the edge. Without targeted support, more shopfronts will go dark and more communities will lose the vibrant mix of local services that define town life.

If independent retail is to survive, it must be treated as an essential part of the economic and social fabric. Because once a shop closes, it rarely reopens, and what replaces it often doesn’t serve the community in the same way.

FAQ

Why are so many shops closing on British high streets?

Costs are rising faster than sales. Rent, rates, wages and card fees make high street retail unviable for many. Online competition and fewer shoppers have only sped this up.

What types of businesses are most at risk of closing?

Clothing, furniture, newsagents and electrical stores are most at risk. These sectors rely on footfall, browsing, and margins that no longer hold up on the high street.

Are retail parks replacing traditional high streets?

Yes, in many ways. Retail parks offer free parking, easy access, and larger stores. That convenience has shifted consumer habits away from the high street.

How do card processing fees affect small shops?

They silently eat profits. Fees of 1.5% to 3.5% per transaction cost small shops thousands yearly, and they can't always pass those costs to customers under UK rules.

What policy changes have made things worse for independent retailers?

Reduced business rates relief, rising wages, and new employment laws have raised costs. Many "support" measures miss the mark in weaker local economies.

Can technology really help save high street businesses?

Yes, if used wisely. Tools like integrated POS and loyalty systems can cut costs and boost efficiency but they must justify their setup and monthly fees.

What can customers do to support local shops?

Pay cash when possible, join loyalty schemes, and shop local more often. Every visit helps with margins, especially when card fees are eating into profits.

What is the future of the UK’s independent retail sector?

Survival depends on adaptation. Shops that reduce costs, adopt tech, and lean into community support can stay afloat. Without change, closures will accelerate.

Photo by John Cameron on Unsplash