Town centre struggles push Scottish retail insolvencies to five-year high

● More Scots retailers collapse in first nine months of the year than all of 2017

The number of retailers in Scotland going bust this year is set for a five-year high as a combination of online shopping, business rates and property charges take their toll on the high street, according to new research.

Analysis of official Insolvency Service statistics by accountancy firm French Duncan found that 56 retailers north of the Border have collapsed in the first threequarters of the year, a figure that has already outstripped the 48 that ceased trading throughout 2017.

Retail failures accounted for 7.8 per cent of all corporate failures in Scotland over the last five years, with nearly 300 retailers going bust during that time, which equates to around one retailer entering insolvency every week.

Eileen Blackburn, head of restructuring and debt advisory at French Duncan, said: “The last year has seen some well-publicised retail failures in Scotland and the rest of the UK. There is clearly a serious issue concerning the future viability of the high street due to several factors.

“At the heart of this, of course, is a high street with a business model that does not reflect the changing spending habits of the nation.

“Not only do people want to spend more online, they want their high streets to be different experiences.

“Yet the landlords and councils who charge rent and rates have not moved with the times either, and are locking retailers into excessively long leases and charging very high business rates regardless of the economic realities of the high street in 2018.”

The latest Retail Sales Index for Scotland, which excludes non-store retailers, showed that overall sales volumes rose 1.6 per cent year on year among larger retailers, but fell by 0.5 per cent for small to mediumsized enterprises, indicating that the downturn may be having a greater impact on smaller, more local retailers.

Blackburn added: “With the key Christmas trading period coming up, many retailers will be hoping that they survive into the New Year with a healthy bounce in their sales values and volumes.”

Meanwhile, a survey conducted by market analyst Retail Economics and law firm Squire Patton Boggs said that more than a third of UK retailers had “done little to no preparation” or were “very underprepared” for a hard Brexit.

According to the study, which includes results from 26 large retailers, 33 per cent would face “significant additional costs” in the event of a no-deal Brexit, while all participants said a no-deal scenario would damage sourcing costs.