By Max Clarke
The effects of a the UK’s low consumer confidence have been evidenced today, with the alarming revelation by PwC that retail insolvencies have jumped 9% in a year.
The rate of closures, equal to some 20 each day this year, have largely been led by clothes and shoe shops, followed by bookshops and jewellers; whilst convenience stores and supermarkets have fared more favourably.
“Retailers will continue to struggle for the next six months and we will see high levels of financial distress among certain types of retailers such as clothes shops.,” said PwC’s retail insolvency specialist, Mike Jervis. “The combination of rising inflation and dented consumer confidence has led to people increasingly trying to find the best deal online. This has made life difficult for store-dependent high street retailers who have seen a drop in sales and reduced footfall.”
British Retail Consortium Director General Stephen Robertson commented on the figures: “High streets are at the heart of local communities and economies, providing jobs and essential services, but some are in trouble. These figures are further evidence of the tough trading conditions being experienced by non-food retailers in particular. With household disposable income falling, consumers are very reluctant to spend on non-essentials.”
“The Government’s review of the high street — headed up by television presenter Mary Portas — comes at a crucial time and must result in urgent action. Practical steps are needed to protect and promote our high streets so they remain attractive locations where businesses of all kinds can thrive. This cannot be left to chance. A proactive approach to managing our town centres would benefit customers, communities, retailers and other businesses. Priorities should include keeping business rates down, deterring crime and having good, affordable parking and public transport.
PwC’s statistics reflect trends previously discussed by the BRC. Poor consumer confidence and shrinking disposable incomes are having a negative impact on non-food retailers in particular and exacerbating long-standing problems in some of our town centres.
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