Region escapes the worst of retail recession

Hull and Wakefield were the hardest hit towns in Yorkshire but the region was boosted by better performances from Beverley, Doncaster, Harrogate, Leeds and Scarborough.

The data, compiled on behalf of PwC by the Local Data company, covered the period from January to the end of May 2011.

Yorkshire was the fourth best performing region behind the South West, North West and East Midlands.

Hairdressing, health and beauty retailers suffered the most, with 19 closures, but there was a growth in charity shops, with 11 opening in the region.

Other sectors hit in Yorkshire were travel agents and tour operators, with six closures, and department stores, with four closures.

The research revealed that Leeds saw the largest number of store closures in the region - 106 - but this was offset by 118 stores opening in the city.

By contrast there were 23 store closures in Wakefield and only 16 store openings.

In 300 town centres across the UK, clothes, shoe shops and jewellers were among the hardest hit in 2011.

Supermarkets, convenience stores and cafes bucked the trend showing growth in the first half of the year. There was also strong growth from the likes of Boots, Costa, Smith and Jones Pubs and Cash Generator.

Toby Underwood, advisory partner at PwC in Leeds, said: “Over the next six months, retailers will undoubtedly continue to struggle. Certain categories such as clothes shops are likely to experience high levels of financial distress.

“The combination of rising inflation, a squeeze on consumer spending, and dented consumer confidence leading to people increasingly trying to find the best deal online has made life difficult for store-dependent high street retailers who have seen a drop in sales and reduced footfall.

“Retailers cannot afford to bury their heads in the sand, and must think about surgery before the problem becomes terminal. They need to engage with their stakeholders early, especially banks, landlords, credit insurers and their staff.”

PwC research indicates that, since the start of the recession, financially troubled retailers have closed, or plan to close, on average half their stores as the high street comes under increased pressure.

Mr Underwood added: “There is no doubt that people are changing the way they shop – the range and frequency of shopping as well as how they browse, transact and collect their goods. In particular, there has been an explosion in internet shopping with it now accounting for over 10 per cent of all UK retail sales a trend that is expected to grow in excess of 20 per cent year on year.

“The key is for retailers to learn from this and adapt for a future that has different requirements. For example, easy accessibility for click and collect, large stores for showing off ranges and enabling trials, exciting show stores for brand building and commuter route small stores for top-up or treat shopping.

“Ultimately, there appears to be only one direction of travel – a reduction in the number of stores with the average store size probably increasing. We expect to see a continuation or even acceleration of these trends by this time next year.”