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High street under pressure

Five Scottish stores a week shut amid soaring costs

Jaeger

Shops are facing rising costs (photo by Terry Murden)


Five high street stores a week are closing their doors across Scotland as shop owners struggle to cope with higher staffing costs and soaring business rates.

The 290 closures last year have been marginally offset by 142 openings, leaving a net loss of 148 stores or 32% more than in 2016.

Across Britain, 5,855 outlets closed last year – a rate of 16 stores a day. This is a marginal increase on 2016 when 15 stores closed every day (5,430 outlets), making it the second consecutive year the number of closures has risen.

During 2017, no Scottish town was immune to the trend of high street loss, according to PwC research compiled by the Local Data company.

The shutdowns are a result of a tough trading environment including a slowdown in consumer spending and rising staff and business rates costs.

Other challenges included a slowdown in food and beverage growth as consumer confidence reached a four year low in December 2017.




Some bright spots remain, such as the Co-op’s £160m expansion plan which could see up to 18 stores opening in Scotland in 2018 and multi-million pound shopping centres due to launch in Glasgow and Edinburgh city centres by 2020.

The largest number of closures were fashion shops, banks, convenience stores and travel agents.

There was, however, some growth on the high street with cafes, tearooms, restaurants and bars among those showing the highest increase in net store numbers in 2017.

Lindsay Gardiner, regional chairman for PwC in Scotland, said: “2017 has proved to be one of the toughest trading periods Scottish retailers have experienced in years – borne out by a 71% rise in store closures with high street names such as Twenty One going into liquidation and others such as New Look and Prezzo closing outlets.  

“And so far this year, there’s been little sign of this pressure letting up with the “Beast from the East” and ongoing cold snaps taking their toll alongside other adverse business factors.

“Online trading continues to be a significant factor in this shifting landscape – and not just in familiar areas such as fashion, food, books and music. Increasingly banks, travel companies and estate agents are feeling the digital pinch.




“However, high street closures tend to be due to more complex structural and cost efficiency planning than the overall market environment, with consumers increasingly looking to interact with their service providers via apps or websites.

“Those retailers who can 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.”

David Lonsdale

Challenging times: David Lonsdale (photo by Terry Murden)


David Lonsdale, director of the Scottish Retail Consortium, said: “These figures demonstrate just how challenging and volatile times are just now for Scotland’s retail industry.

“These figures should serve as a wake-up call to government, with a far greater focus brought to bear on reducing the costs of doing business from retail premises.”

The SRC pointed out that: 

  • Business rates for all shops in Scotland are rising by a further £19.2 million in 2018-19
  • The large firms’ business rates supplement is set to cost retailers in Scotland £14 million in 2018-19
  • SRC estimates the apprenticeship levy is costing retailers in Scotland £15 million a year

 



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