Insolvencies, vacancy rates and crime are all up for Britain’s beleaguered stores and shops
New research from the British Retail Consortium (BRC) reveals that over 6,000 retailers have closed their doors in the previous five years.
This is up slightly on the official figures from the Insolvency Service but could include the figures from June which they take additional time to verify. They will almost certainly reach over 6,000 when they are released in July.
Retail corporate insolvencies 2019 – 2023*
|Food, drink, tobacco
|Info & Comms
|Cultural & recreational
|All other retail
The figures show that all retailers are undergoing tough times with insolvencies accelerating in 2022 after two pandemic affected years with official support and artificial constraints on creditors taking action such as issuing statutory demands and asking the court for winding up petitions to enforce unpaid debts.
In addition to the high number of closures, the BRC have also found that vacancy rates have increased so that now one in every ten shops in the UK stands empty. This increased in the second quarter of 2023 to 13.9% and is even worse in shopping centres and malls which currently have a vacancy rate of 17.8%
Helen Dickinson, Chief Executive Officer of the BRC, said: “The past five years saw Britain lose 6,000 retail outlets, with crippling business rates and the impact of the Covid lockdowns a key part of decisions to close stores and think twice about new openings.
‘The North and Midlands continue to see the highest amount of empty storefronts while London’s vacancy rate remains the lowest, improving over the last quarter thanks to the opening of new flagship stores, more office workers, and tourists visiting the capital.’
She added: ‘To inject more vibrancy into high streets and town centres, and prevent further store closures, the Government should review the broken business rates system.
‘Currently, there’s an additional £400 million going on retailers’ bills from next April, which will put a brake on the vital investment that our towns and cities so desperately need.
She added: ‘The high street has seen some of the most notable impacts, with rising rents and increased competition putting pressure on small and independent businesses, who may struggle to meet high operating costs.
‘Across all location types, vacancy has reached critical levels, highlighting an ever-increasing need to redevelop units to breathe life back into retail destinations.”
Earlier this week Frasers Group chief executive Michael Murray said that their portfolio was under review and some outlets were too big and they had to find solutions for the excess space.
Eight branches have closed this year with 28 closing since the brand was bought out of administration in August 2018.
“A licence to shoplift”
As well as increasing economic headwinds, many retailers also feel that they are facing the burdens of increasing crime affecting them without adequate support or protection.
Sharon White, chairwoman of the John Lewis Partnership has called for better protection for retailers following a law change in Scotland claiming that criminals have a “licence to shoplift” in England calling it a crisis that is hiding in plain sight.
Shoplifting had surged 26% in the past year with the BRC finding more than 850 incidents of violence and abuse towards shop workers being recorded every single day.
She said: “One of the big issues for us is staff safety. Gangs and shoplifters have become much bolder given some of the cost-of-living pressures.”
Scotland introduced new legislation in 2021 that made it a specific criminal offence for store employees to be assaulted, threatened or abused while at work.
White said: “I have lost count of the number of times I have visited John Lewis or Waitrose branches in England and been told that the police simply don’t have the time or resources to respond to a shoplifting incident. It’s not a victimless crime.”
Lucy Brown, director of security with John Lewis Partnership said they’d seen a real increase in shoplifters with the majority shoplifting on a regular basis.
These concerns were also echoed by Co-op Managing Director Matt Hood.
He said they had recorded their highest ever levels of retail crime, shoplifting and anti-social behaviour with one store recording almost 1,000 incidents every day.
There were more than 175,000 incidents in the first six months of 2023, up by a third over the last year. Physical assaults on staff have increased year on year by a third and anti-social behaviour and verbal abuse by a fifth.
They also submitted a Freedom of Information request that showed that police failed to respond in 71% of retail crimes reported.
Matt Hood said: “We know retail crime is driven by repeat and prolific offenders, and organised criminal gangs. It is an ongoing challenge for all retailers and in the worst instances can be described as looting.
Association of Convenience Stores chief executive James Lowman agreed and said: “Our members are at the sharp end, seeing crime in their communities get steadily worse. Shop theft is rising because repeat offenders and organised criminals are targeting local shops to steal goods to resell.”
As well as being one of the most important sectors of the economy, retail is also one of the clearest signifiers as to the general direction of travel for the rest of it.
Shops with empty shelves, having to put up prices or go into administration or liquidation are highly visible compared to other areas and something most of us would recognise when walking down any high street or town centre.
The increasing number of insolvencies and difficulties for those just about making ends meet should alarm anybody expecting an easing of economic conditions in the rest of the year.
But there are options and choices that shop owners and directors can take now that would give them the best chance of being able to emerge stronger.
We offer a free initial consultation for anyone who wants to find out what they can do to protect their business or close it quickly and efficiently, letting them move onto their next professional challenge rather than struggle on against worsening conditions and lengthening odds that things might get better before they get worse.
If you’re a worried retailer, shop owner or regular customer who’s wondering how this will affect their own business – get in touch with us today and take early action while you can still positively impact your own business.