Level of Yorkshire retailers at risk rises from less than a quarter to almost a third during 2017
The high street is continuing to struggle, according to the insolvency and restructuring trade body R3, which reports that proportion of bricks-and-mortar stores in Yorkshire at higher than normal risk of insolvency has risen from 24.1% in January to 30.2% in November. This is slightly worse than the national picture, which saw a rise from 24.1% to 29.3%.
Looking at the rest of the UK, of the 12 regions surveyed, Northern Ireland (24.2%), London (27.8%), and Scotland (27.9%) had the lowest levels of elevated risk. Shops in the South West (32.5%), Wales (30.2%); and the North East (31%) had the highest proportions of shops at greater than normal risk.
The breakdown of different types of shops in Yorkshire shows that among the worst affected are clothes shops with 30% at higher than normal risk, and home furnishings stores with 29.2%. Shoe shops (24%) and bookshops (26.2%) fared better.
The research from R3 follows the October ONS retail sales figures which showed a fall of 0.3% last month, compared with October 2016. Retail growth in quarter three slowed to its lowest since quarter two of 2013, a year-on-year rate of 1.5%. Online sales values, which now account for around 17% of all retail spending, increased by 11% year-on-year.
“Given that retail is often seen as the barometer of the economy as it reflects the confidence of consumers, it is extremely worrying to see this downward trend over the last nine months,” comments Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds. “Last month, the CBI reported that 50% of retailers had seen sales volumes decrease in October 2017 compared with the previous year whereas only 15% had seen a rise.
“There’s no doubt that there has been a weakening in people’s optimism in recent months and this, together with rising inflation, is likely to result in households cutting back on spending. However, inflation appears to be steadying following the Bank of England’s first rise in interest rates in ten years last month, hopefully just in time for a busy Christmas shopping season on the high street.
“Any retailer, or other type of business, which is finding current trading conditions difficult to navigate should not wait to act, but should seek advice from a qualified professional. An outside perspective can be vital in analysing the best way forward for a firm in distress.”