Shops shut in trading battle

Retail: Costs and online deals take toll – but Granite City holds out hope

More stores shut up shop in Scotland in the first half of the year as a result of rising costs and the pressures of trading online takes its toll, a report has found.

But the number of shops in Aberdeen – one of the cities included in the analysis – has fallen by just two, which researchers said offered retailers “hope for the coming months” despite difficult trading conditions due to the oil and gas downturn.

The report, by accountancy firm PWC and the Local Data Company, found that the number of stores closing in Scotland in the first half of 2016 rose to 230, compared to 140 in the same period in both 2015 and 2014.

Offsetting this, the report found that 116 outlets had opened in the same time – led by fashion retailers, satellite TV outlets and ecig shops. This number was an increase on the first half of 2015 when 95 new shops opened doors, but a decline on 2014 when 133 opened.

In Aberdeen, the researchers counted 22 store openings in the first half of the year versus 24 that shut down.

Kevin Reynard, office senior partner for PWC in Aberdeen, said the relatively stable number could point to signs a “corner has been turned”.

He said: “While there were more closures than openings, it is by one of the smallest percentages in the country, which may give existing retailers hope for the coming months. The last few years have not been the easiest for retailers in the north-east, so this data should be welcomed.

“This is clearly just a halfyear report but this time last year we had more store closures than we have this year, so hopefully a corner has been turned. We will have to wait and see because retail, like everything else in the north-east, is tied into the performance of the local economy.”

The report revealed that Scotland was the worst performing region in the UK for the survival of high street shop outlets, with a net change of -2.7% compared to a UK average of -0.8%.

Lindsay Gardiner, regional chair for PWC in Scotland, said: “While the figure of 203 closures against 140 in previous

“The last few years have not been the easiest for retailers”

years is higher and seems more dramatic, it averages out at just over one closure per day, which has been the Scottish average for most years since 2012 – but that will be of little comfort to people who have lost their jobs and livelihoods because of this. As this data covers the first half of 2016, the full ramifications of the EU referendum vote are not realised but we have seen hints of challenges – like foreign exchange rates, Living Wage pressures and business rate increases – in certain parts of the Scottish retail sector as cost challenges begin to materialise.”

Matthew Hopkinson, director of The Local Data Company, added: “The role of the store continues to evolve. Provision of a seamless on and offline experience is key. ‘Click and collect’ is but one example of this.

“Chains are having to work harder than ever to guarantee store location, format and experience along with a strong web presence, social presence and logistical operation that delivers to consumers’ ever increasing demands of ‘now’.

“This is severely impacting profitability and hastens store closures.”

Photograph: Kami Thomson SHELF LIFE: Retailers hope they have turned the corner after recent hard times.