More pain on the way for UK retail

More pain on the way for UK retail

April 10, 2017

City AM retail reporter, Helen Cahill reports that a triple-blow of tax hikes, rising costs and a squeeze on consumer spending is threatening to wipe out thousands of British retailers, with a string of familiar high street names expected to fall into administration this year.

Nick Hood, a business risk adviser at Opus Restructuring, said between five and 10 high-street names could become insolvent this year.

“There will be more casualties going through the summer,” he said. “A lot of stakeholders are now thinking there’s been a really fundamental change and I think the trigger for it is business rates… There is clearly a sorting-out going on in certain sectors, such as footwear and middle-market fashion.”

Hood added: “suppliers and credit insurance firms will be looking “very carefully” at the high street retailers he has deemed at risk, and will be making decisions about whether or not they want to support struggling businesses until the Christmas sales period.”

Jaeger became the latest high street name to state its intention to shut stores at the end of last week. Twelve other retailers had already entered into administration by the end of March, according to analysis by the Centre for Retail Research (CRR).

Spending on the high street fell by 1.3 per cent in March, card giant Visa said this morning. Its latest consumer spending index revealed weakest quarter for spending growth since 2013.

Richard Hyman, an independent retail analyst, said the number of retail failures will “gain momentum” throughout the year.  “By the end of this year it will be a large number,” he said. “A much larger number than post-Lehman brothers.”

To read the full City AM article, click on the link below:

Fifty-four retailers went into administration in 2008, according the CRR, affecting more than 74,000 employees.

Year Companies failing Stores affected Employees affected
2017 (end March)             12           771          4,675
2016            30        1,504        26,110
2015            25           728          6,845
2014            43         1,314         12,335
2013            49        2,500         25,140
2012            54         3,951         48,142
2011            31        2,469         24,025
2010            26           944         10,930
2009            37        6,536         26,688
2008            54         5,793         74,539
2007            25        2,600         14,083