Data reveals multitude of retailers in UK forced to close stores between January and May 2012.
B2Business Hub reports that in the first five months of 2012, UK retailers closed an average of 20 stores a day, according to data compiled by Local Data Company (LDC) on behalf of professional services firm PwC, with clothes shops, mobile phone shops and book shops being amongst the hardest hit.
The latest retail insolvency statistics for Q2 2011 released by PwC also reveal that there were a total of 375 insolvencies in that quarter, a nine percent increase on the same quarter in 2010.
Research indicates that on average, retailers have closed or plan to close half their stores since the beginning of the recession, with previous research by PwC suggesting that high street retailers have struggled to compete with the growing popularity of online shopping.
Mike Jervis, PwC insolvency partner and retail specialist, commented: “Retailers will continue to struggle for the next six months […] The combination of rising inflation and dented consumer confidence has led to people increasingly trying to find the best deal online. This has made life difficult for store-dependent high street retailers who have seen a drop in sales and reduced footfall.”
In order to meet the challenges ahead, Jervis suggests that retailer “need to engage with their stakeholders early, especially banks, landlords, credit insurers and their staff […] we have seen a number of successful turnarounds involving the use of consensual arrangements and early engagement with banks, landlords and shareholders which have saved retail businesses.”
Cartridge World franchisee Carl Evan spoke with The Recycler in September regarding the plight of the UK’s high street and independent retailers, stating that while the popularity of online shopping may be growing, there are clear differences between online and traditional purchasing: “There’s more to the high street in a local community than actually purchasing product. The high street is not just about the transaction: it’s about the social interaction.”
However, it was reported in October that online sales in the US outperform that of traditional sales four to one, with US online retail spending stated to have reached $43.2 billion (€33.6 billion) for Q2 2012, rising 15 percent from Q2 2011.