High street carnage forecast as 46,000 stores face financial trouble

21 December 2023 , 18:14

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A closed Wilko store on Kings Heath High Street, Birmingham (Image: Birmingham Mail)

The ongoing cost-of-living crisis is prompting fears of high street carnage in the new year.

A study found nearly 46,000 retailers are in “significant financial distress” despite the recent easing of inflation. It is 7.5% higher than in the summer and over 2,000 more than a year ago.

Nearly 4,500 are in what are classed as in “critical” difficulties, industry experts Begbies Traynor found. These include retailers with county court judgments exceeding £5,000 against them.

Homewares chain Wilko joined the list of high street casualties this year, with 400 store closures leaving more than 12,000 staff jobless. In the first 10 months of this year, more than 5,300 shops closed, leading to 67,500 job losses, according to the Centre for Retail Research.

The run up to Christmas is known as the “golden quarter”, when many retailers hope to make the bulk of their money. Those struggling are often exposed in the new year, when spending slumps.

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A study found nearly 46,000 retailers are in significant financial distress (PA)

Begbies Traynor partner Julie Palme warned: “After a year where consumers faced one of the worst cost-of-living squeezes, the shopping bonanza many retailers were relying on this Christmas does not seem to have materialised.”

Figures from the CBI business lobby group found retail sales by volume fell for the eighth month running. Principal economist Martin Sartorius said: “Retailers are bracing themselves for a new year’s chill.”

Graham Hiscott