Multiple retailers closures accelerate to 20 stores a day on average across Britain’s town centres in the first half of 2012, says PwC and Local Data Company analysis.
- Toy shops, clothes shops, jewellers, card & poster shops and furniture stores all falling in numbers
- Discount stores, convenience stores, coffee shops, bookmakers and charity shops bucking the trend
- Multiple retailer closures in July and August reach 32 per day
Dramatic Change from 2009; Multiple retail store numbers are in decline
From a net increase in 2009 of 1.2%, multiple retailers have for the second consecutive period shown a decline in their numbers, from -0.25% in 2011 to -1.4% in the first half of 2012. This is a net reduction of 953 shops in the first half of 2012 compared to 174 shops in the whole of 2011. Great Britain’s multiple retailers closed 20 stores a day on average across the country’s top 500 town centres in the first half of 2012, according to data compiled on behalf of PwC by the Local Data Company (LDC).
Some categories badly affected while others buck the trend…
The data also revealed that across multiple retailers in 500 town centres computer games, toy shops, clothes shops, gift shops, jewellers, card & poster shops and furniture storeshave been amongst the hardest hit in the first half of 2012. Cheque cashing (payday loans), pawnbrokers, discount stores, convenience stores, coffee shops, bookmakers, bureaux de change and charity shops bucked the trend showing growth during the first half of the year.
Many multiple retailers have too many locations and sales do not support the overhead
As we move into the latter half of the year, and towards the key trading period in the run up to Christmas, analysis of July and August 2012 shows that the number of closures has increased to 32 per day for these two months as a result of recent administrations and draw downs.
Mike Jervis, PwC insolvency partner and retail specialist, commented: “All retailers in distress have too many locations. The insolvencies of Game, Peacocks and Clintons demonstrated this in spades. Relatively long leases, with inflexible terms, have been entered into in a growth phase of the economy which is no longer appropriate. Where over-expansion has already taken place, retailers need to face that reality and formulate a strategic plan in partnership with landlords, not in confrontation with them. There are sophisticated tools to analyse the extent to which sales from closed stores migrate to a retailer’s other locations. Properly managed, a large part of the lost sales can be regained. Retail is increasingly becoming a partnership between the store group, its suppliers and the owners of its locations. Like any partnership which falls on hard times, dialogue involving all partners is key.”
Table: Main multiple retailer net changes by classification – January to June 2012
|Risers||Net Change (Units)||Net Change (%)||Fallers||Net Change (units)||Net Change (%)|
|Convenience food stores||23||4.6||Computer Games||-177||-44.1|
|Bureaux de Change||37||10.9||Home furnishing & furniture||-54||-36.7%|
|Charity shops||35||1.1||Gift shops||-82||-36.3|
|Pawnbrokers||55||8.4||Card & Poster shops||-37||-3.9|
|Cheque cashing (payday loans)||45||11.3||Toy shops||-103||-32.8|
|Pound shops||50||7||Camping goods & Outdoor wear||-33||-8.4|
|Bookmakers||53||2.3||Clothes shops incl lingerie||-276||-3.6|
Source: Local Data Company
Christine Cross, chief retail adviser to PwC, said: “If all retailers in distress have too many stores, then the appetite of the convenience food sector and value chain players to consume excess high street space, is a symptom of the continuing pressure on consumer spend. Apparent interest in the JJB stores from value chain players shows that some retail sectors are still in growth.”
Table: Openings and closures of multiple retailers by region across the top 500 GB town centres in the first half of 2012
|Number of store closures||Number of store openings||Change|
|East Of England||275||206||-69|
|Yorkshire and the Humber||210||168||-42|
Source: Local Data Company
Matthew Hopkinson, director of the Local Data Company, concluded: “This rapid increase in the draw down of the multiple retailers in the first half of this year is not unexpected. It also has some way to go as consumer spend remains low and the omni-channel environment requires fewer but larger and more ‘dynamic’ stores. The departure of so many larger stores is a major issue for many town centres, especially in secondary centres, where they have for many years been their high street’s anchors. A similar slowing in growth of the independents combined with this multiples draw down has significant consequences beyond just driving vacancy rates up for many of these town centres.”