Retail chains close 20 shops a day
High street retail chains closed an average of 20 shops a day last year, according to figures released by PwC and the Local Data Company.
The analysis shows that stores specialising in cards, computer games, clothing, health food, sports and jewellery were some of the hardest hit in 2012 while pound shops, pawnbrokers, charity shops, betting shops and supermarkets bucked the trend showing growth during the year.
From a net increase in 2009 of 1.2%, multiple retailers have for the second consecutive year shown a decline in their numbers from -0.25% in 2011 to -2.7% in 2012. Year on-year, the net reduction in the number of stores climbed more than tenfold from 174 shops in 2011 to 1,779 shops in 2012. The UK’s multiple retailers closed 20 stores a day on average across the UK’s top 500 town centres in 2012.
Analysis of the three months between December 2012 and February 2013 shows that the potential rate of closures, principally through administrations, would accelerate to 28% per day for the period.
Never Miss a Retail Update!Mike Jervis, insolvency partner and retail specialist, PwC said: “2012 saw more retail chains go into insolvency than ever before. The failed chains generally shared two problems- too many stores and too little multi-channel activity. A number of them had failed to deal with their underlying issues by hiding behind light touch restructuring processes, especially Company Voluntary Arrangements. 2013 has seen the downward trend become even worse.
“If under performing retailers are to avoid becoming part of these statistics for next year, their shopping baskets should contain an acute knowledge of their customers and their customers’ needs; robust cashflow planning; honest analysis of the performance of existing and potential new stores; the bravery to admit mistakes regarding products and stores before dealing with them; clinical attention to costs; early engagement with banks, landlords and suppliers; appropriate debt and capital structures.”
Matthew Hopkinson, director of The Local Data Company, added: “2012 was the first year that we have seen significant reductions of multiple retailers in town centres across Great Britain with a net loss of nearly 1,800 stores which, if one takes an average size of 4,000 sq ft per unit then this equates to over 7 million sq ft of space. This is the equivalent of 131 football pitches, or just over four Westfield London’s.
“We can expect to see this trend continue and indeed accelerate in 2013 as more leases come up for renewal along with the ever increasing demands from consumers for space that delivers an experience good enough to pull them away from their technology devices. The end of 2012 and the beginning of 2013 has seen the most dramatic period on record as companies controlling more than 1,400 shops went into administration.
“Will the discounters, pawnbrokers, charity shops, coffee shops and supermarkets continue to fill a large proportion of these closing stores? Town centres will have to adapt faster than ever before to maintain their attraction to consumers. Data to be released tomorrow on independent retailers will add to these woes.”
