The number of applications to build new retail stores fell by 9% year on year to 6,700 in 2015/16.
This was the seventh consecutive year of decline, according to research by commercial law firm EMW. The number of annual applications is down by nearly half (44%) on pre-recession levels in 2008/9.
EMW said many traditional bricks-and-mortar retailers are continuing to lose market share to their pureplay online rivals, such as Asos and Boohoo.
It notes that the collapses of traditional retailers BHS and Austin Reed were in part caused by their failure to keep up with the shift to online shopping.
Brexit may put additional pressure on the sector, it warned.
“With online retailers continuing to win market share, high street firms have less of an apetite to open new shops, instead opting to develop online services or squeeze extra profits from existing space by changing the shopping experience or re-purposing stores to act more as showrooms or collection points,” said Aimee Barrable, principal at EMW.
“Recent high profile closures will lead to more retail space becoming available on the market. Those retailers still looking to expand their high street presence might look to acquire some of these recently vacated stores instead of applying for any new retail developments.
“Also, it may be that many retailers wait before committing to any new shop developments until they have a clearer picture of the economy in the aftermath of the Brexit vote.”