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Consumer confidence helping retailers

E-cigarettes trend helps ease rate of shop closures

E-cigarettesThe growing popularity of e-cigarettes – and improving consumer confidence – has helped slow down the rate of shop closures in Scotland.

The rise in the electronic alternatives to cigarettes has seen a rise in the number of ‘tobacconists’.

According to PwC analysis compiled by the Local Data Company (LDC), 280 stores closed in Scotland while 221 opened – a net reduction of 59.

In every Scottish area except for Perth, more stores closed than opened as consumer spending and shopping habits continued to diversify. Edinburgh and Perth were the largest losers with a net change of -16 and -12 stores respectively.

Across the UK, 5,138 outlets closed while 4,640 opened, a net reduction of 498. This is the lowest closure rate in five years since the peak seen in 2012, when 20 stores a day were closing.

It also represents the lowest levels of High Street churn – entries and exits – since 2010 as retailers moderate their response to shifting customer shopping habits.

Number of stores Jan 2015

Number of stores Dec 2015

Number of store closures 2015

Number of store openings 2015

Net change %

Net change %

Scotland

3202

3143

280

(2014: 312)

221

(2014: 246)

-59

-1.84

Aberdeen

455

447

38

30

-8

-1.76

Ayr

180

173

23

16

-7

-3.89

Dundee

242

237

21

16

-5

-2.07

Edinburgh

966

950

79

63

-16

-1.66

Falkirk

137

125

20

8

-12

-8.76

Glasgow

878

874

74

70

-4

-0.46

Leith, Edinburgh

57

56

2

1

-1

-1.75

Paisley

125

118

15

8

-7

-5.6

Perth

162

163

8

9

1

0.62

Bruce Cartwright, head of business recovery services at PwC in Scotland, said: “Regulation continues to impact on money shops. With the notable exception of Brantano Footwear (where a number of stores were successfully preserved following sale out of administration) there have been fewer high profile closures.

“Closures are often part of a larger strategic picture where fewer leases are being renewed on expiry.

“We do see some growth, albeit many of these are small operations or franchises such as stores offering forms of vaping or e-cigarette advice. The likelihood is that this increase is a short spike rather than the beginning of a large, ongoing trend.

“On the other hand, the continued growth of the fast food industry shows Scots applying their disposable income in a familiar fashion.”

Top risers and fallers by business type in Scotland in 2015

Risers

Net Change Units (and no. of units total at end of year)

Net Change (%)

Fallers

Net Change Units (and no. of units total at end of year)

Net Change (%)

Fast Food Takeaways

6 (44)

15.79

Cheque Cashing

-10 (13)

-43.48

Tobacconists

6 (14)

75

Banks (and other financial institutions)

-13 (141)

-8.44

Four star hotels

4 (36)

12.50

Fashion Shops

-7 (196)

-3.45

Candle Suppliers

2 (6)

50

Public Houses/Inns

-6 (92)

-6.12

Golf Equipment

1 (2)

100

Baker Shops

-5 (72)

-6.49

Charity Shops

2 (150)

1.35

Estate Agents

-4 (50)

-7.41

Maternity Wear

3 (1)

200

Clothes – Men

-4 (29)

-12.12

Grocers

2 (7)

40

Clothes – Women

-4 (63)

-5.97

Jewellers

2 (65)

3.17

Pawnbrokers

-3 (32)

-8.57

Computer Game Stores

2 (21)

10.53

Bookmakers

-2 (133)

-5.26

Source: Local Data Company

Martin Cowie, head of private business at PwC in Scotland, said: “Tightening regulation in the financial sector for cheque cashing shops, and similar, has hit hard and the financial institutions continue to restructure, leading to more closures.

“Online shopping continues to play a major role in the changing shape of the high street – indeed we now see click and collect not only as an offering of the mainstream stores, but they’ve expanded their delivery network into local corner shops. The longer-term implications of this strategy are still to be revealed in terms of the impact it has on the smaller independent operators.”

Matthew Hopkinson, director of The Local Data Company, said: “These numbers illustrate the improvement in consumer confidence, low interest rates and low inflation that characterised 2015. They also show how high streets continue to evolve from a pure purchasing environment to one of experiences, services and above all food and beverage consumption rather than primarily goods consumption.

“Whilst stability has returned overall for the chain retailers in our high streets the fact remains that they have continued to close more shops than they open and have done so since 2011 with out of town locations being a destination of choice for many with free parking, easy access and more space to service and deliver the experiences that the modern consumer demands.

“I expect the overall trend to remain the same as banks continue to close large numbers of branches, traditional comparison goods retailers rationalise store numbers and the fact that the current exceptional growth of food and beverage outlets is unlikely to continue at the same pace in 2016.”



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