High street shop closures highlight retail struggles
High street shops closed at a rate of nearly 14 a day in the first half of 2018, according to a new study.
According to an analysis of 500 high streets across the UK, 2,692 stores closed their doors between January and June.
In the same period, a record low number of outlets started up, with the study from PwC and the Local Data Company concluding that the average high street is in its worst state for five years.
Numerous businesses had sought insolvency methods in a bid to stay trading, although numerous high profile retailers have ceased to exist.
A rise in company voluntary arrangements has also done little to stem the flow of businesses that are shutting their doors, especially as consumer confidence has slumped too.
Rising business rates and operational costs, coupled with increases to the National Minimum Wage have hit the retail sector in 2018, while uncertainty surrounding Brexit has dented consumer spending.
Numerous brands have closed stores across the country in an effort to bring costs down, while the restaurant sector has also struggled.
The study states that closures reflect the growing prevalence of online shopping and a tendency to have food delivered rather than eating out.
The figures do not include store closures from a number of CVAs, administrations and other insolvency procedures that have taken place in the second half of 2018, meaning the situation is unlikely to improve.
Further figures from the Local Data Company reveal that 24,205 retailers closed their doors in the first half of the year, while 19,803 opened.
That means there are more than 4,400 gaps in the high street, more than twice the amount noted at any point in the last five years.
Businesses facing difficulty should seek advice at the earliest opportunity, as this will likely increase the level of potential insolvency and restructuring methodology that can be employed.
Options reviews can help to showcase the best direction for a company to move in, as an insolvency practitioner can review the current situation, assess financials and assets, and develop an appropriate strategy.
By Phil Smith
If you would like to have a free no obligation chat with one of our advisers please call us on 0207 186 1144.
View all Business Insights