Two new reports have indicated UK high street traders have been facing a growing crisis in recent years, which is not just due to the recession.
Many businesses could be left needing insolvency services to deal with their financial situation if they have been pushed to the brink of bankruptcy by the wider economic situation and changing features of the way consumers buy goods.
The Portas Review of the high street by retail expert Mary Portas has been published alongside data from the Department for Business Information and Skills, with the latter publication noting: “After years of growth, high street retailers have found the last ten years or so to be the most difficult of trading environments.”
It outlined these as including the cost of higher rents, increased business rates and the minimum wage, while at the same time such retailers have been unable to raise prices in accordance with these due to the competition they face from supermarkets and other larger retailers.
The report added: “Research indicates that occupancy costs are proportionately highest for standard shop units and this goes some way towards explaining the greater concentration of tenant administrations and store closures in this sector of the retail market.”
Reflecting on this situation, the Portas Review suggested there has been too much of a focus on commerce in high streets and less on community, arguing for such places to be made into the “lively, dynamic, exciting and social places” that shopping malls can never be. She suggested new business models need to be developed to attract modern customers.
Welcoming the report, the Federation of Small Businesses argued that much can be done to help small traders in town centres, if the localisation of planning decisions is changed to allow a shift away from out-of-town developments and important initiatives like an increase in town centre parking facilities.
However, such developments may come too late for some small traders, not least those also bearing the impact of the economic downturn, which could mean that in many cases bankruptcy advice is needed.
Where positive developments do take place, however, it may be that business recovery services could put some retailers back on track and in a position to take advantage of enhancements to an area that could succeed in bringing more customers back to the high street.