The death knell of the British High Street has been sounded before, but with thousands of independent retailers going out of business and customers shunning independent restaurants, the threat now seems more real than ever.
Deborah Hyde, CityWire.co.uk – 24 June 2009
Rising unemployment and falling disposable income growth will lead to a sharp reduction in consumer spending. Some 33% more retailers will go bust this year than last year; by next year more than 140 retailers will be shutting shop for good per week.
The figures come from a report from accountants and business advisors, BDO Stoy Hayward LLP, which predicts retail sales will fall 4% in consumer spending as shoppers become increasingly cautious.
Low interest rates and policy measures aimed at boosting the economy are not likely to halt the rate of UK business failures until at least 2011.
Retailers
The report’s authors predict 4,300 retailers will become insolvent in 2009 and that will rise to a peak of 7,335 business failures in 2010.
‘Consumer spending is set for a steep contraction in 2009 and households will continue to be hit by rising unemployment, weaker earnings growth and reduced perceived wealth levels due to declining asset prices,’ said Shay Bannon, Head of Business Restructuring at BDO Stoy Hayward.
The gloomy outlook for retailers is reiterated as a report by Experian suggests the downturn will mean the closure of up to 35,000 shops this year as a result of the recession.
