Fears for high street as store closures accelerate

BHS is among the names to have disappeared from the high street. Picture: Greg Macvean
BHS is among the names to have disappeared from the high street. Picture: Greg Macvean
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Concerns have been raised over the health of Scotland’s town centres after data published today revealed that the number of store closures jumped sharply in the first six months of the year, with the net drop in retailers the highest in the UK.

Research from accountant PwC and The Local Data Company found that the number of shops north of the Border that closed in the first half grew to 203, compared to 140 in both the first half of 2014 and 2015.

Lindsay Gardiner, regional chair for PwC in Scotland, said that although the latest figure compared with preceding years “is higher and seems more dramatic, it averages out at just over one closure per day, which has been the Scottish average for most years since 2012 – but that will be of little comfort to people who have lost their jobs and livelihoods because of this”.

Additionally, the number of stores opening in Scotland in the period was not enough to outweigh closures, and came in at 116, up from 95 in 2015 but down from 133 in 2014.

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The overall number of shops in the locations examined fell to 3,114 by the end of June from 3,201 in January, representing a net change of -2.7 per cent, more than triple the UK average of -0.8 per cent.

As for the overall reasons for the shutters coming down on businesses, Bruce Cartwright, head of business recover services for PwC in Scotland, noted: “In general, we are seeing far fewer closures due to outright insolvencies, but more due to lower key restructuring of store portfolios.”

Topping the list, in percentage terms, of types of business to close were satellite TV equipment and services specialists, with a net drop of 80 per cent, and at the other end of the scale, coffee, fashion and charity shops only saw a fall around the 4 per cent mark.

In terms of regional variation in Scotland, Falkirk was the “sole source of positivity around the figures”, though its store total only increased by one over the period. Glasgow saw 32 openings and 50 closures to result in 869 outlets.

Turning to the Scottish capital, it saw the greatest number of openings in Scotland at 36. However, it also the highest number of closures at 82, and Mark Hoskyns-Abrahall, office senior partner for PwC in Edinburgh said that while that “will give some cause for concern, it needs to be tempered with looking beyond the figures” with the shuttering of stores in many cases due to companies merging branches.

Looking at Scotland’s outlook more broadly, Gardiner noted that the figures do not reflect the “full ramifications” of the UK’s vote to leave Europe. However, he said “hints of challenges” have become evident in some areas of the Scottish retail sector “as costs challenges begin to materialise”.

Highlighting Black Friday and Cyber Monday later this month, Gardiner added that such hurdles “can be managed provided revenue is maintained – so consumer spending will be crucial in the coming months”.

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