UK's high street 're-emerging'
The UK high street is “re-emerging” after four years of store culling on the back of a boost in consumer confidence and cheaper fuel costs, according to a report.
Of the 13 major high street retailers placed into administration last year, 42% of stores survived – up from 35% in 2013 but down from 66% in 2011, restructuring and advisory firm FRP Advisory said.
High profile administrations included Phones4U, La Senza, Jane Norman and Internacionale.
Half of staff affected by administrations (50%) held on to their jobs last year, up from 48% in 2013 but down from 66% in 2011.
However, the 2014 staff and store survival rate was bolstered by Phones4U, with around 2,000 members keeping their jobs when parts of the business were sold to rivals.
The report said signs of significant improvement in the high street came from the first quarter of this year, when early evidence showed that the number of major retailers entering administration had fallen dramatically.
Glyn Mummery, partner at FRP Advisory, said: “The high street has finally turned a corner and is re-emerging after four years of significant store culling, in a fitter albeit leaner shape with retailers having to cope with a new norm of tougher operating margins but boosted by a return in consumer confidence and spending power helped by cheaper fuel costs.
“By 2014 the high street reached a watershed with those distressed retailers who had failed to remodel their business in the face of multi-channel buying habits – bricks and mortar, bricks and clicks or internet only delivery – either failing completely or emerging from administration with a radically different store footprint to maximise footfall spend from the most efficient locations.”
Mr Mummery added: “Many retailers are benefitting from the ease to shoppers’ weekly spend due to lower petrol prices, but with the supermarkets engaged in a new pricing war to hold onto market share there is a knock-on effect for all high street retailers as margins come under pressure.
“The high street has turned a corner but it is still a place where only the fittest will survive and inevitably at some point in the near to medium term the benefit of a low interest rate environment will end, which for several years had allowed a few retail zombies to refinance for a last lifeline.”
