Member Article

Troubling times for retailers

An average of twenty retailers closed daily between January and the end of May, with clothes, shoe shops and jewellers amongst the hardest hit.

However, the information did show the North East to be one of the better performing regions, with Newcastle and Darlington performing particularly well. Supermarkets and convenience stores have also bucked the trend by showing growth in the first half of the year.

Nonetheless, many retailers will continue to struggle over the coming months, and certain shops are likely to suffer the same fate as Jane Norman and Habitat, who were forced into administration last month.

Sean Hamilton, head of business recovery services PwC Newcastle said: “ The combination of rising inflation, a squeeze on consumer spending and dented consumer confidence leading to people increasingly trying to find the best deal online has made life difficult for store-dependant high street retailers who have seen a drop in sales and reduced footfall.“

He also stressed how important it is for retailers to recognise problems early on so they can attempt to solve them.

He added: “Through our work we have seen a number of successful turnarounds involving the use of consensual agreements and early engagement with banks, landlords and shareholders which have saved retail businesses.”

Retailers must now adapt to the future by considering the impact of Internet shopping. Click and collect systems, show stores and innovative methods of brand building would help to reconcile the two areas of commerce. However, it does seem that many retailers will now be forced to reduce store numbers while concurrently increasing the average store size in a bid to cement their place in the market.

This was posted in Bdaily's Members' News section by Ruth Mitchell .