High street woes expected to last until 2020 | 1 June 2012
Ernst & Young’s ITEM Club has speculated that the woes of Britain’s high street retailers are set to last until at least 2020, due to a ‘derailed recovery’ from the recession.
What’s more, growing mortgage costs could have a knock-on effect on the nation’s commercial property market, as they could force retailers out of their current locations and leave them unable to invest in other spaces.
In order to combat the issues facing empty stores and abandoned outlet spaces, some have suggested utilising concepts such as shorter-term leases or hybrid retail; however neither of these seem to have taken off as yet.
The less than positive news from Ernst & Young was shared by Telegraph.co.uk, which confirmed that consumers’ hesitance to spend their cash on themselves is also contributing to the high street’s demise. A spokesperson for Ernst & Young, Andrew Goodwin, explained: “After the tightest squeeze on consumer incomes in a generation the worst is now behind us.
“[However] rather than splashing their cash, we’re expecting to see conscientious consumers keeping a relatively firm grip on their purse strings. Instead, they are likely to focus on trying to pay down debt.”
The thought that things will only get worse may not be warmly welcomed by Britain’s retailers, which are struggling as it is to keep afloat; especially Clintons Cards. It has been set a deadline of June 8th to find a buyer – or else face closing down. Despite American Greetings buying out Clintons’ £35 million of debt earlier this year, the beloved brand is yet to find a deal that pleases its administrators.
All in all, the future seems less than bright for Britain’s high streets, with other retailers (like Peacocks) facing similar woes to those of Clintons Cards. The impact of this upon future retail entrepreneurs hasn’t become clear as yet, although some have suggested they may opt for pop-up stores in order to assess the demand for their product; then moving on if it doesn’t work out.
Written by Deborah Bates on behalf of Qube Global Software
While posted by Qube Global Software all views expressed are not necessarily those of the company. All facts are verified where possible directly by the author.
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