Retail chains shut 30 shops a day in July and August
New research has revealed that embattled retail chains are closing stores at a rate of more than 30 a day across the UK.
The study by retail data provider Local Data Company for PricewaterhouseCoopers found that retailers in the UK closed 32 stores a day in July and August as a result of administrations and drawdowns. That figure is up from 20 a day in the first six months of 2012.
From a net increase in 2009 of 1.2%, multiple retailers have for the second consecutive period shown a decline in their numbers, from -0.25% in 2011 to -1.4% in the first half of 2012. This is a net reduction of 953 shops in the first half of 2012 compared to 174 shops in the whole of 2011.
The data also revealed that across multiple retailers in 500 town centres computer game stores, toy shops, clothes shops, gift shops, jewellers, card & poster shops and furniture stores were amongst the hardest hit in the first half of 2012. In contrast pawnbrokers, discount stores, convenience stores, coffee shops, bookmakers, bureaux de change and charity shops bucked the trend by showing growth during the first half of the year.
Mike Jervis, PWC insolvency partner and retail specialist, commented: “All retailers in distress have too many locations. The insolvencies of Game, Peacocks and Clintons demonstrated this in spades. Relatively long leases, with inflexible terms, have been entered into in a growth phase of the economy which is no longer appropriate.
“Where over-expansion has already taken place, retailers need to face that reality and formulate a strategic plan in partnership with landlords, not in confrontation with them.
“Retail is increasingly becoming a partnership between the store group, its suppliers and the owners of its locations. Like any partnership which falls on hard times, dialogue involving all partners is key.”
Matthew Hopkinson, director of the Local Data Company, added: “This rapid increase in the drawdown of the multiple retailers in the first half of this year is not unexpected. It also has some way to go as consumer spend remains low and the omni-channel environment requires fewer but larger and more ‘dynamic’ stores. The departure of so many larger stores is a major issue for many town centres, especially in secondary centres, where they have for many years been their high street’s anchors.
“A similar slowing in growth of the independents combined with this multiples drawdown has significant consequences beyond just driving vacancy rates up for many of these town centres.”
