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An increase in the number of high street retailers going bankrupt or entering
receivership is “inevitable”, according to new research by specialist retail
analyst Verdict Research.
In its UK Town Centre Retailing report, the company has forecast that
like-for-like sales growth on the high street will be just 0.1% a year over the
next five years.
The study also claims costs will rise by up to 4% across the sector, largely
because of higher rents and increases in the minimum wage.
Town centre shops are under pressure from lower-cost rivals operating from
suburban retail parks and internet retailers.
Last year, town centre shops took £767 million less than in 2004, the first such
drop in modern times.
According to Verdict, 12 big high street retailers have gone into
administration, shut down or been sold in the last year.
Nick Gladding, senior retail analyst, explained: “The fragility of demand and
retailers’ finances casts doubt on whether all proposed retail developments will
be completed on schedule, or at all.
"Property developers are well aware of the risk of committing to a development
without pre-letting much of the scheme.
"Unless demand proves sufficient, the development pipeline seems likely to be
scaled back.”
Source:
RedAlert
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