As rate of closures slows down...
High streets suffer from shortage of store openings
This is now the biggest worry for town and city centre managers as consumers continue to buy good online.
There was a net loss of 25 shops in 2013 as 299 shut their doors and 274 opened.
But last year the net reduction shot up to 66 as the number closing down edged up slightly to 312 while only 246 opened.
The biggest net loss of stores last year was in Edinburgh and Leith (-18), followed by Dundee (-16) and Glasgow (-16), while Falkirk saw only three multiple retailers closing in 2014 compared to 16 in 2013. Perth was the only city to see more stores open than close (+2).
Mobile phones shops, former bank branches, money services shops, fashion shops and estate agents were the biggest sufferers, according to PwC research compiled by the Local Data Company.
Bruce Cartwright, head of business recovery services at PwC in Scotland, said: “The Scottish high street continues its drastic overhaul in response to the advance of online sales and changing consumer demand, with year’s numbers exposing the harsh impact of ‘macro’ changes on the high street, especially in certain sub-sectors.
“Regulation has blindsided the money shops, the advance of technology has hammered some phone operators and the internet continues to dent the clothing sector.
“Despite the Scottish economy reflecting healthy, sustainable growth during 2014 and into 2105, the net loss of shops has accelerated. The insolvencies of Phones4U, Blockbuster, Albemarle & Bond, and La Senza, a diverse cross-section of the retail market, epitomise these factors.
“Despite the continuing problem of closures, new sub-sectors, such as discount shops and charity shops keep growing. The strength of the restaurant and fast-food sectors is also a boost for the high street.”
Martin Cowie, head of private business at PwC in Scotland, says the data shows a retail shift towards clicks over bricks. He said: “Our high streets are continuing to transform as consumers increasingly adopt the newer digital channels, mobile technologies and smartphone apps available to them: traditional retail channels to market are being wiped out and new channels created in this evolving online world.
“Indeed, over the last year we’ve been increasingly seeing online revenues far outstrip store sales growth for most retailers, from a much higher base.
“These trends have been with us for some time and the likelihood is that this rate of closures will continue, particularly as we’ll increasing see younger ‘digital natives’ develop very different relationships with traditional high streets than previous generations.
“During this period of record change, retailers are facing an increasing need to have an integrated total retail strategy for the digital age, rather than separate digital and non-digital channels that often add more to costs than revenues.
“Those who successfully keep pace with consumers by merging the experience of shopping online and in-store in a polished and smooth way, will see the rewards in their sales performance. For example, having a strong store presence for browsing and returns, and strong online for purchasing. Savvy retailers could also perhaps consider in-store Wi-Fi to allow customers to view product videos and research reviews.”