Startling new analysis
Shop closures heading for 60% increase on last year
Shop closures are accelerating (pic: Terry Murden)
Retailers may are heading for a 60% rise in failures over last year as they continue to battle rising costs and changing consumer behaviour.
Analysis of official Insolvency Service statistics found that 56 retailers have gone bust in the first three quarters of this year which is already higher than the 48 which collapsed during the whole of 2017.
The figures indicate that the annual figure for 2018 could be as high as 75 or 80 retailers for the year.
Additionally, retail failures have accounted for 7.8% of all corporate failures in Scotland over the last five years. Between 2012 and 2017 298 retailers in Scotland have gone bust which equates to one retailer entering insolvency every week over the entire five-year period.
Eileen Blackburn, head of Restructuring and Debt Advisory at French Duncan, which conducted the analysis, said: “The last year has seen some well publicised retail failures in Scotland and the rest of the UK. There is clearly a serious issue concerning the future viability of the High Street due to several factors. Internet shopping is undoubtedly playing its part but there are other factors at play including very high business rates and inflexible landlords.”
The latest Retail Sales Index for Scotland figures (which excludes non-store retailers) show a divergence in performance between smaller and larger retailers. The data shows that overall volumes were up 1.3% year on year but fell 0.5% among small to medium sized retailers while rising 1.6% among larger retailers.
“This could be a sign that the downturn in the High Street is having a greater impact upon the smaller, more local retailers while larger concerns are more able to utilise their greater marketing budgets and stronger locations to maintain volumes,” said Ms Blackburn.