High noon for the high street

Sunday 20 January 2013

THE number of jobs and shops under threat on Scotland's high streets in just the first two weeks of this year is more than one-third of the total lost during the whole of 2012, new figures have revealed.

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SPECIAL REPORT BY JUDITH DUFFY

The figures indicate that it is now High Noon on the High Street, with the number of job losses, closed firms and threats of closure now multiplying in 2013 at a rate that vastly outstrips that of 2012.

The collapse of major chains HMV, Jessops and Blockbuster has left the jobs of some 1409 Scottish workers at risk in the first 17 days of 2013. That figure is more than one-third of the 3851 jobs lost in the retail sector last year, according to statistics from the Centre for Retail Research. It also found that 134 high street shops in Scotland were at risk in the first two weeks of 2013 alone – nearly 40% of the 346 stores hit last year. Camera retailer Jessops was the first high-profile casualty of 2013, with all of its 187 stores shutting shortly after it went into administration on January 9. Less than a week later, music chain HMV announced it had gone into administration after suffering dismal Christmas sales. Stores have remained open and around 50 parties are said to have expressed interested in buying all or part of the 92-year-old company. Then high-street DVD rental firm Blockbuster announced it had gone under. It is also continuing to trade while administrators seek a buyer, but yesterday it emerged that the group is to close 129 more stores across the UK, in addition to 31 already given notice of closure. That means 760 staff are facing redundancy, although the closures will not take place immediately. Professor Joshua Bamfield, director of the Centre for Retail Research, spoke of the problems some firms have found as consumers turn to internet shopping. He said: "Obviously there have been a number of retailers hanging on by the skin of their teeth. There is something in common with all of these [companies] which has to do with technological change in the marketplace, so there is nowhere obvious for them to go." The figures show that across the UK in the first 17 days of this year, a total of 991 stores and 10,720 employees are under threat. Throughout all of last year, the equivalent figure was 3951 stores and 48,142 employees. Although 2012 was the worst year since the start of the economic crisis in 2008, in percentage terms 2013 is already much worse. Bamfield predicted that in 2013, around 60 to 65 companies could fail across the UK, affecting around 5000 stores and up to 65,000 employees. But he added: "Having said that, I am mildly optimistic about 2013 and it could well be that by around June or July people will be spending some more money." The decline of top brands has led to warnings from retail analysts that the number of empty shops in Scotland's high streets could double. Just over 14% of stores in Scotland – around 20,000 – are currently unoccupied, according to figures from the Local Data Company. David Martin, head of policy at trade body the Scottish Retail Consortium, said: "We can expect that households will continue to rein back spending. "Retailers will continue to offer the most competitive deals they possibly can, but this is obviously at the risk of margins, which are incredibly squeezed - this year there will be some retailers for whom the sums just simply don't add up." However, Martin argued that more could be done to assist retailers, such as the freezing of business rates – the property tax for companies – by the Scottish Government. This levy is due to increase again in April by 2.6%, equating to a bill of around £20 million for businesses. Martin said: "The retail sector employs around 240,000 people in Scotland, so it is a big employer and a huge contributor to the Scottish economy. We are not asking for a handout, we are just asking for more support to continue maintaining employment and investment and jobs in local communities." John Hannett, general secretary of shopworkers' union Usdaw, said the job losses on the high street were a "tragedy" for the workers involved. He added: "With the Government's commitment to austerity showing no signs of easing, we expect the economic recovery will continue to be a slow, drawn-out one."

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High noon for the high street

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