There’s no getting away from the fact that the last few years have been tough for retailers. The problems have been felt right across the sector, but often its smaller businesses and independent shops that have had the worst of it.
The root cause of immediate pressure on a retailing business is often lack of disposable income within its catchment area. Many people are still finding their incomes squeezed as prices rise, so no matter how good your products and how much demand there is, consumers are cutting back.
For high streets, it can be difficult once the rot sets in. Once a few big name stores close, the footfall reduces and smaller stores suffer, leading to closures and more empty units. Many shopping streets in the UK are now in a very poor state. So what is the future?
Many are predicting a limited economic recovery in the year to come – a welcome prospect. But what does it mean for the UK high street?
Unfortunately, that picture is less encouraging, with Retail Futures predicting a further reduction in total store numbers by 22% over the coming year. The economy may be improving, but consumer spending is increasing at a slower rate than retail operating costs, while the way we shop is also changing.
Changing Shopping Habits
As consumer spending grows, every indication suggests this won’t be to the benefit of traditional retailers as the growth in spending is mostly occurring online. The UK now has the highest online retail share in the world. But is this really bad news?
For retailers who have embraced online selling, the reach of the internet may more than compensate for reduced footfall on the high street. However, those who combine traditional selling with a buoyant online presence could find themselves as factors in the recovery of their own local shopping area.
Whatever happens with retailing, it’s clear that a good electronic shop window is now far more important than bricks and mortar.
Location, Location, Location
If you intend to maintain a physical presence alongside your online facility, then it’s becoming clear that some shopping streets have far better prospects than others. With low footfall and large retailers moving out of town, many once-thriving high streets are decaying rapidly. Others with good transport links, wealthier customer bases, and interesting independent stores are becoming more vibrant. Knowing the prospects of your own town can be key to survival because no matter how good your own product, if you’re surrounded by boarded up shops with reduced footfall and anti-social behaviour, your prospect will be weakened.
Dealing with Difficulties
With times so difficult, getting the right help and advice can be vital to the future of a retail business. Here at Irwin Insolvency, we do far more than help to wind businesses up. Our goal is to help you survive the hard times. Ideally we want to see you succeed and grow, so get in touch with us today and we’ll help you on the road to recovery.