Fears about the changing nature of the British high street look set to be realised, after new research reveals that 20 shops were closed a day on British high streets in 2012.
A new report from PricewaterhouseCoopers and the Local Data Centre found retailers selling computer games, clothes, banks, health foods, sports goods, and jewellers, travel agents, recruitment agencies have been amongst the hardest hit in 2012 were the hardest hit, making up the majority of the 7,337 closures last year.
Shops doing well on the high streets included pound shops, pawnbrokers, charity shops, cheque cashing (payday loans), betting shops, supermarkets and coffee shops - all of which bucked the trend showing growth during the year.
And initial analysis of December 2012 through to February 2013 suggests the rate of shop closures could increase to 28 a day, according to Mike Jervis, insolvency partner and retail specialist at PwC.
"2012 saw more retail chains go into insolvency than ever before. The failed chains generally shared two problems- too many stores and too little multi-channel activity. A number of them had failed to deal with their underlying issues by hiding behind light touch restructuring processes, especially Company Voluntary Arrangements. 2013 has seen the downward trend become even worse," he said.
"If underperforming retailers are to avoid becoming part of these statistics for next year, their shopping baskets should contain an acute knowledge of their customers and their customers' needs; robust cashflow planning; honest analysis of the performance of existing and potential new stores; the bravery to admit mistakes regarding products and stores before dealing with them; clinical attention to costs; early engagement with banks, landlords and suppliers; appropriate debt and capital structures."
The South-East saw the most store closures, with shops closing in 2012. Greater London came second with 1,281 and the South-West came third with 721. Although stores continued to be opened by other companies across the UK, the net amount of stores was still down across the UK.
Matthew Hopkinson, director of The Local Data Company, explained: "2012 was the first year that we have seen significant reductions of multiple retailers in town centres across Great Britain with a net loss of nearly 1,800 stores which, if one takes an average size of 4,000 square feet per unit then this equates to over 7 million sq ft of space. This is the equivalent of 131 football pitches, or just over four Westfield London's.
"We can expect to see this trend continue and indeed accelerate in 2013 as more leases come up for renewal along with the ever increasing demands from consumers for space that delivers an experience good enough to pull them away from their technology devices."
“Will the discounters, pawnbrokers, charity shops, coffee shops and supermarkets continue to fill a large proportion of these closing stores? Town centres will have to adapt faster than ever before to maintain their attraction to consumers. Data to be released tomorrow on independent retailers will add to these woes.”
One way of retailers boosting the high street is to embrace ecommerce and adopt new strategies to entice customers to come back - multi-channel propositions are proving popular with retailers bucking the downward trend.
Dan Wagner, chief executive of mobile payment company mPowa, said shops should move beyond ecommerce to become 'everything commerce', whereby the tools and approaches used online are employed on the high street.
"We are about to see a major shift in the way we shop. The time has gone where we walk around shops, picking items up, carrying them around the shop, queuing up, getting them all out at a till, packing them all away again, so that you can carry them around with you for the rest of the day and all the way home.
"An 'everything commerce' mentality will allow unparalleled flexibility regarding transactions. Whether transactions take place in store; completing the whole transaction online in store and having items delivered home, or starting the transaction in store then finishing at home, high street shops will need to adapt to the changing demands placed upon them."
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