- Retail insolvencies in Ireland increased by 35pc in the first half of 2026, according to PwC data.
- The ‘doughnut effect’ describes the hollowing out of town centres due to out-of-town shopping developments.
- Long-standing family businesses are closing, with footfall declining and retail mixes changing.
- Retailers cite online shopping growth, high VAT rates, and commercial rate increases as pressures.
- Poor planning on out-of-town shopping has contributed to the decline of town centres.
Retail insolvencies increased by 35pc in the first half of 2026 compared with the same period last year, according to the PwC Insolvency Barometer. A total of 109 retailers became insolvent during the first six months of the year, accounting for almost one in every four corporate insolvencies recorded during that period. Main streets across Ireland are under pressure, with long-standing family businesses closing their doors and a noticeable shift in the types of shops remaining, such as nail bars, barber shops, and vape shops.
Industry figures cite poor planning and the development of out-of-town shopping centres as contributors to the decline, creating a ‘doughnut effect’ that hollows out town centres as activity shifts elsewhere. The rapid growth of online shopping has further changed how and where people spend their money, with retailers pointing to the 23pc VAT rate on shoes and commercial rates increases as additional burdens. Parking charges and fines are also cited as driving customers away from town centres towards retail parks with free parking.
Jean McCabe, chief executive of Retail Excellence Ireland, shared that some cities and towns have really failed on the planning front when it comes to too much out-of-town shopping, which creates the doughnut effect. She added that they are now struggling and scrambling to revive the town centre, but the anchors outside the town are too strong to be the counterweight. Dr Carla Maria Kayanan, an urban geographer and planner at Maynooth University, agreed that the doughnut effect can happen and unhappen, noting that there is a renewed focus on supporting local and bringing commerce back into city centres.
