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Britain's high streets could be ghost towns when the recession ends, if, as some expect, the consumer slowdown triggers a sharp rise in stores closing. According to a survey by PricewaterhouseCoopers (PwC), one in five shops could be “void” by the time that the economy picks up again.
The impact of the credit crunch on high streets will be exacerbated by the growth of internet shopping and by impact of new shopping centres, such as Cabot Circus, in Bristol, and Westfield White City, in West London. PwC estimates that 3,600 shops could be seeking new tenants if 10 per cent of national retailers get into financial difficulty over the next year.
The research comes as the British Retail Consortium argues that consumer confidence has fallen to new lows, with 69 per cent of people stating that it is a “bad time” to buy goods.
Barry Gilberston, a PwC partner, said: “What we are seeing is going to have a huge impact on the shopping environment, in particular high streets. The problem is who will take over the empty units? A few years ago coffee shops came in, but now there is really no one waiting in the wings.”
About 30 retailers have gone into administration so far this year, including chains such as Dolcis, Stead & Simpson, Mk One, MFI and Rosebys, the home furnishing group. In most cases, a chain will emerge from administration with a far smaller store portfolio.
PwC worked on eight restructurings or formal administrations of national retailers in the autumn of 2007. On average 27 per cent of the store portfolio was closed or sold. Of 20 insolvencies this year the average number of stores “jettisoned” is 36 per cent. Jessops, the photography retailer, closed 81 stores in a move critical to its survival.
New shopping centres equivalent to eight Bluewaters are being opened between this year and next, including Westfield White City. The £1.6 billion centre is expected to have a big effect on the West End of London and Kensington High Street.
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Time that the property industry and the Government changed the law from 21 year leases, upward only rent reviews and rent deposits and/or personal guarantees, it has been too long coming many other Countries such as Australia do not have these onerous leases. They are a hinderance to growth!
Andy Moore, Solihull, UK
hopefully most of the closures will be estate agent offices!
Joe M, newcastle , uk
We "Obviously Need More Charities being Formed to take upthe "Excess Units"" Rates Free!
paul, manchester, uk
Oh my Lord - decimated High Streets.
Maybe one of the eight or ten building societies in my High Street could make way for a decent butcher - and I promise I will shop there provided Dewhurst don't think they qualify.
David, Dubai & PL12, UAE & England
considering that labours only regeneration of towns and cities has been through shopping is it any surprise that 1/5 shops could go bust. they have completely forfeited the dotcom boom by mistaking SME's for entrepreneurship. they think that a barbers shop is the equivalent of a dotcom or engineer
will, grimsby, uk
why would anyone want to shop in high streets in the west end or kensington
there is a complete lack of affordable parking and you have a traffic warden waiting lurking on every corner waiting to pounce
the government needs a total rethink if it wishes to avoid future ghost towns
Terry, London W4, England
Had a weekend break in York in October. It already felt like 20% of the units were closed on some of the pedestrianised streets. Mainly the shops for local people (e.g. food shops, estate agencies).
Alex, Cheltenham,
We all have to move with the times and look for new opportunities. So, the writing is on the wall, what are YOU going to do about it. Hopefully more than WHINGING to the Government about your bad luck and DEMANDING that THEY do something.
It is YOUR problem, YOU fix it.
Bob Travels, Stevenage,
Ghost towns when the recession ends? they're ghost towns now...
paul cooke, gloucester,
Where are these deserted high streets? Winchester was packed out yesterday , with people shopping.
Andy, winchester,
How about using them for a chain of not-for-profit stores selling healthy well-priced seasonal UK-sourced fresh food, particularly in poorer areas? Guarantee low rent to the retailers running them. This would help solve the obesity problem, boost local enterprise and UK farmers. A huge opportunity!
Robert C, London, UK
In the place of the empty shops they will put bars and discos. The High Street will be for drug peddlers, prostitutes & knife weilding youths. Cabot Circus, Westfield White City and Bluewaters will be the replacement of the High Street. Instead of wealth distributed the wealthy will be more wealthy
Robert Winter, San Sebastian, Spain
Nothing to stop retailer of any size selling via net, mail order, print collaterals etc.
Take the products/brands to the target consumers.
Sales polarity has changed. Customer no longer come to you. You must go to them.
Physical shops confined now to giving brand tangible expression.
Leigh Vernier, Riyadh, Saudi Arabia
Perhaps people will start living in town and city centres again.
SusanHill, Chipping Campden, UK
Cabot Circus is not a brand new centre, it is redevelopment of an existing shopping area, and seems to be mainly clothing shops. Logical as clothes don't fit well into the internet model, but makes a boring shopping experience.
andrew, swindon,