Following on from the last blog on the expansion of Supermarkets it was interesting to see the figures in the news this week on the rate of shop closures. Figures for July & August suggest that High Street shops are closing at a rate of over 30 per day.
Past over expansion for many retailers has seen them close shops as consumer spend reduces and customers shopping habits reflect a preference for free parking in larger, out of town centres or on retail parks. Some of the large retailers that went into administration this year had previously over expanded and had too many retail outlets.
Data from over 500 towns showed that clothes, toy, gift, jewellers, furniture, card and computer game shops were the type of retailers likely to be closing whereas charity, coffee, pound shops, discount stores, pawnbrokers, betting shops and convenience stores are opening in their place.
However retail sales overall were up in September as back to school and winter clothing sales contributed to an increase of 0.6% in comparison to last months decrease of 0.1%. Compared to this time last year figures were up overall by 2.5% for September. Better weather and the end of the Olympics have seen customers return to the shops, but also this week we have had employment figures released showing a large decrease in unemployment numbers in the last three months.
In recession consumers are more careful when they spend, they want a bargain and to know that they are getting value for money and will search out the best places to go. Many big name retailers are what bring people in to town centres and supports the hub of other local, independent shops so losing them has wider implications for local economies.
Some good news and some bad for British retail. It certainly seems to be a time of adjustment as economic conditions push retailers in to administration, to reduce their estates and to take a long hard look at their strategy. On the other hand the retailers that are getting it right such as John Lewis that saw an increase in sales of 16.2% last week are profiting. The Olympics didn't work for most retailers, the terrible summer and recession has all impacted.