Difficult times for high street firms

Shopping centres and retail parks also feeling the squeeze

High street occupiers throughout Scotland and the rest of the UK have not had their troubles to seek over the last few years.

Tayside and Fife are not immune to the nationwide trend of shops and leisure operators closing – and in some cases being replaced by units in shopping centres and retail parks.

It is also reasonable to conclude the increase in online operations, from established retailers and newcomers, and the low-cost environment this brings, have played a part in this displacement.

However, we are beginning to see those very same chains, in those very same retail parks and shopping centres, starting to feel the squeeze.

For example, last month saw the announcement from restaurant chain Prezzo it will be closing nearly 100 restaurants, many of which are in shopping centres, with some also located in key city locations.

The decision to close these outlets, including some in the Scottish Central Belt, was part of a financial restructuring after securing the backing of creditors for a company voluntary arrangement.

A common factor in the current woes of well-known British retailers and restaurants is they occupy high-profile locations, many of them leased.

In most cases the Grade A space taken will not have been cheap, the capex on fit-out not inconsiderable and the length of the lease not short.

We need to remember leases, along with all of the additional costs such as rates and energy bills, need to be paid for before any profit can be realised.

The challenges faced by high street occupiers are numerous, with difficult trading conditions caused by the drift away from traditional town centres, the economic uncertainty caused by Brexit and low-cost online operators.

It is often said on the retail front that you need “bricks to get clicks”, but for how long will that remain the case?

In the main, we only tend to see stories about those big failures – the recognisable high street names.

But it’s not only large corporates that are fighting on numerous fronts.

Smaller, independent firms can also find themselves exposed to the same economic headwinds, and in many cases won’t have the financial resources to save themselves. But it’s not all doom and gloom. Major town and city centres will adapt and regenerate as they have always done.

It seems that for every high street retailer or bank that closes, there is a new restaurant or cafe operator willing to fill the void.

That may not always be the case, but for the moment it helps to maintain the sense of place and vibrancy essential for any high street.

Prezzo recently announced it would be closing nearly 100 restaurants.

Paul Jennings. Picture: Ryan Crighton.