Struggling retailers closing 20 shops a day

RETAILERS ARE closing an average of 20 shops per day as squeezedconsumer spending takes its toll on the high street.

Retail insolvencies shot up by 9 per cent to 375 in the secondquarter of the year, with clothing stores, jewellers and bookshopsthe hardest hit, according to a report from PricewaterhouseCoopers(PwC) and Local Data Company, published yesterday.

Mobile phone shops, music shops and pubs and nightclubs are alsostruggling as the combination of rising inflation and loominggovernment cuts drag household incomes to their biggest slide forthree decades, according to some estimates.

A string of big names have either folded or committed toshrinking their operations in recent months. Former high streetstalwarts such as Thorntons, Jane Norman and Habitat are all butgone, while the likes of Carpetright and Mothercare are cuttingback.

According to the PwC research - which looked at 300 town centresacross the country - since the start of the financial crisis,struggling retailers either have closed, or plan to close, onaverage half their portfolios.

There were some glimmers of light amid the doom and gloomyesterday. Supermarkets, convenience stores and cafs are bucking thetrend with growth in the first quarter, while pawnbrokers, take-away restaurants and bookmakers also doing relatively well.

There are also stark regional variations in the PwC findings. Thenumber of shops in Scottish town centres has fallen 30 per cent thisyear, with contractions of 19 per cent in the south-east of England,and 17 per cent in the West Midlands. But there have been bigincreases elsewhere - such as the 48 per cent rise in shop numbersin the south-west - leaving the total across the country slightly upover the year so far.

The latest "footfall" numbers from Experian, published yesterday,also offered some hope to retailers. The index shows growth of 0.2per cent in the number of shoppers in June, the first year-on-yearrise since January (although with the caveat that last June'snumbers were depressed by the distraction of the World Cup).

But even before the financial crisis, retailers were feeling thepinch as shoppers increasingly looked for bargains online. In 2007,just 4 per cent of people were regularly buying on the internet, afigure that has shot up to 14 per cent, according to a survey of1,000 consumers earlier this year.

Experts are predicting retailers will continue to struggle forthe next six months at least, with clothes shops likely to continueto bear the brunt of the sector's difficulties. Mike Jervis at PwCsaid that retailers need to take drastic measures to ensure theirsurvival. "They cannot afford to bury their heads in the sand, andmust think about surgery before the problem becomes terminal," headded. "Retailers need to engage with their stakeholders early,especially banks, landlords, credit insurers and their staff."