Retail insolvencies up 10 per cent

Dismal weather has been blamed for the 10.3 per cent rise in retail collapses during the last quarter, when the wettest April and June on record kept shoppers at home.

The number of casualties has been escalating year-on-year for each of the past four quarters, highlighting the squeeze on the high street as hard-pressed shoppers cut back on non-essential items and seek out discounts.

Large stores are losing out to online shopping at international websites like Amazon. Retail chains to go bust include Julian Graves, Clinton Cards and Game. Others, like Mothercare, have announced large-scale store closures as they move a greater proportion of their operations online.

The north east and Cumbria saw the biggest increase, up 70 per cent on the same period last year.

When asked whether the figures signalled the death of the high street, a spokesperson for the British Retail Consortium (BRC) answered emphatically “no”.

“According to our own figures,” he told Channel 4 News: “Eleven per cent of high street shops are standing empty across the UK at the moment – that’s worryingly high – but that’s about current economic difficulties which are compounding problems at the moment.”

The impact of several factors – from rising business rates to the cost of parking and the lack of local investment in retail centres – have combined to make surviving a double dip recession especially hard for retailers.

In some cases rent regimes have been relaxed, with landlords offering more flexible rents, but the BRC argues that “there is further to go on that”.

Initiatives to revive Britain’s high streets have been welcomed, but while schemes like the Mary Portas pilot are hoped to positively impact on the fortunes of individual high streets, they are unlikely to affect the prospects of large retail chains.

The BRC is particularly critical of the government, which has done “nothing like what it should on business rates”, which increased by 5.6 per cent in April 2012 after an increase of 4.6 per cent the previous year.

Labour’s Shadow Local Government Minister Roberta Blackman-Woods today said today the latest figures show the coalition’s policies are “clearly hurting retailers”.

She said: “The British high street desperately needs a long term strategy for both the economy and our struggling town centres. We want to see the government temporarily reverse the VAT hike, create a ‘competition test’ to support smaller businesses and give communities greater control over their town centres.”

The dismal performance of the retail sector “bucks the trend” across the wider economy, which according to the PriceWaterhouseCooper research shows a fall of 3 per cent in the number of insolvencies on the previous year.