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Business News

Big retailers shut shops at rate of 20 a day in 2012

The impact of the recent collapses on the high street is laid bare today in figures that show a rapid acceleration in the number of stores closed by major chains.

Big retailers exited 20 stores a day in 2012, while last month's collapse of three chains has further increased the rate of closures, according to the accountancy firm PwC and the research specialist Local Data Company.

If all the near-1,000 shops in the administrations of the camera specialist Jessops, the entertainment chain HMV and the DVD rental firm Blockbuster were to close, this potential figure would jump to 28 shops a day between December and February.

Mike Jervis, an insolvency partner at PwC, said: "2012 saw more retail chains go into insolvency than ever before. The failed chains generally shared two problems – too many stores and too little multi-channel activity. 2013 has seen the downward trend become even worse." Chains reduced their store numbers by 2.7 per cent last year, compared with a 0.25 per cent decline in 2011 and an increase of 1.2 per cent in 2009.

Retailers of cards, clothes, health foods, jewellery and sports goods were among the hardest hit in 2012. Computer game specialists suffered the biggest fall of 45 per cent in store numbers.

But the growth of cheque-cashing, pawnbrokers and pound shops continues apace, with them increasing their stores by 20 per cent, 13.2 per cent and 13 per cent respectively.

Similarly, discounters and supermarkets have also been bagging stores from administrators to HMV, Jessops and Blockbuster, with Morrisons alone picking up 63 shops from them.

Christine Cross, PwC's chief retail adviser, said: "What is surprising is the speed at which stores have been picked up by value and grocery retailers in particular. Good businesses with good operating models and good people don't fail."