Pandemic piles on further pressure as high street insolvencies continue to rise

THERE have been warnings of “more sorrow” to come as new figures have revealed the extent of the troubles on Scotland’s high streets prior to the massive pressures brought on by the coronavirus pandemic.

An analysis by Apropos, a Uk-wide property platform run by DJ Alexander, of data from the Insolvency Service, found that high street failures in Scotland hit their second-highest level in a decade last year. The number of businesses falling into insolvency hit 274 in 2019, a 9.1 per cent increase on the previous year and the highest since 315 businesses went bust in 2012.

The analysis covers retailers, restaurants and pubs, as well as those involved in real estate activities. The latest figures are nearly 55% higher than the 177 recorded in 2010, reflecting a progressive decline in fortunes during the past decade.

David Alexander, joint chief executive of Apropos, said the decline has been driven by high rents, the shift to online shopping, and the over-supply and rapid expansion of restaurants in the casual dining sector.

“It is clear that the Scottish high street has been in trouble for some time, but these figures indicate just how much trouble it was in before this year,” he said. “The aftermath from the pandemic will undoubtedly bring more sorrow to the centres of our towns and cities as the initial lockdown and subsequent measures will have had a disastrous effect on the viability of many businesses.”

Mr Alexander said there needs to be a “reinvention” of how people use urban centres, as some markets have “resolutely” shifted online. This has been particularly true in retail and real estate.

“Some commercial landlords have become more placatory over rents since March, but probably not enough to save many businesses,” he said.

“The growth in delivery companies and the expansion of outlets involved in takeaways has only increased the pressure on restaurants since the pandemic began, and our love affair with online shopping has increased exponentially over the last six months, impacting severely upon retail and those involved in real estate activities.”

He further added: “Activities which cannot be completed online will thrive and grow, as will those which provide a unique experience of being in the heart of our communities.”