The number of stores closed by retail chains in Britain has soared over the past 12 months, according to research. Figures revealed by administrator PricewaterhouseCoopers (PwC) have found that over the last 12 months, an average of 20 shops closed every day, reaching 32 per day in July and August of last year. Retailers selling computer games, health foods and cards were among the hardest hit, making up a large percentage of the 7,337 closures last year.
The figures show toy shops, clothes shops, jewellers, card & poster shops and furniture stores all falling in numbers. While Cheque cashing (payday loans), pawnbrokers, discount stores, convenience stores, coffee shops, bookmakers, bureaux de change and charity shops bucked the trend showing growth during the first half of the year.
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. Great Britain’s multiple retailers closed 20 stores a day on average across the country’s top 500 town centres in the first half of 2012, according to data compiled on behalf of PwC by the Local Data Company (LDC).
The Local Data Company has built up a strong reputation in the business location, local search, insight and imagery market, and its data is currently used by leading directories and search engines as well as local authorities, the media, consultants, retailers, surveyors and financial institutions. Its data and insight is derived from physically visiting over 2,700 locations and over 500,000 premises across Great Britain on a 26/52 week cycle.
Matthew Hopkinson, director of the Local Data Company, said: “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.”
The figure increased in the last three months of 2012 as a spate of household names went into administration. According to the study, more High Street chains fell into insolvency in 2012 than ever before.
Matthew Hopkinson, continues: "People have got less money in their pockets, employment is tighter and also we've seen a massive growth in the supermarkets in terms of non-food retail, and we've seen the internet go from nothing to 12% of retail sales - and that's forecast to be at least 30% by 2020."
With this rise of online shopping the chains did not need as many stores as they did in the past, a trend that looks set to accelerate this year. With many calling for drastic change to enable the survival of the high street, Dan Wagner, CEO of mobile payment company mPowa, thinks that shopping should be redefined. He says that as the way we shop changes, the only way for the high street to survive will be to embrace ecommerce, using it to their advantage.
He argues the answer is for ecommerce to become ‘everything commerce’ whereby the tools and approaches used online are employed on the high street.
Dan said, “We are about to see a major shift in the way we shop. The time has gone where we walk around shops, picking items up, carrying them around the shop, queuing up, getting them all out at a till, packing them all away again, so that you can carry them around with you for the rest of the day and all the way home.
“An ‘everything commerce’ mentality will allow unparalleled flexibility regarding transactions. Whether transactions take place in store; completing the whole transaction online in store and having items delivered home, or starting the transaction in store then finishing at home, high street shops will need to adapt to the changing demands placed upon them.”
“I have shopped at one high street chain for 30 years with no recognition. They do not know my tastes or interests so I am given the same standard service as every customer. If ecommerce is embraced on the high street, this can change overnight; customers will be notified of different offers and deals that may suit them via their mobile as they shop. On the high street and in shopping centres, your mobile will become a compass leading you towards potential purchases tailored to your taste.”
But is that the whole of the story? According to Professor Cary Cooper, a psychologist from Lancaster University. He warns that communities are damaged by the decline of the High Street.
"It's important psychologically and socially for families and communities that we have this, and seeing empty shops, seeing the kinds of shops that are now on the High Street, doesn't encourage communities or families," he said.
Last month, a business recovery firm has claimed that more than 100 retailers are on the critical list and could follow the likes of HMV and Jessops into administration.
Research by Begbies Traynor has found a 35pc increase in the number of retailers experiencing significant distress before Christmas, meaning 13,700 shopkeepers experienced a sustained period of deteriorating finances or received a county court judgement of less than £5,000.
Pat Harrington, General Secretary of Solidarity commented:
"Retailers could do more to improve their offering but the general economic climate is still going to affect them. I have seen so many shops close on High Streets and be replaced by pay-day lenders and other usurers who exploit the poor. These are the hub of many local communities and they are being destroyed. Action at Council and Government level is required."
Report from Ian Bell