News
16 Jun 2014 10:54am

Retail insolvencies up 12%

Retail insolvencies have risen to their highest number in five years, up by 12% in the previous 12 months

According to accountancy firm Wilkins Kennedy, 1,287 retail businesses failed in England, Scotland and Wales in the past 12 months, up from 1,149 the previous year.

Insolvencies are particularly high among independent convenience stores, Wilkins Kennedy said. Big supermarket chains are continuing their expansion into the convenience store market.

Major chains now have over 2,300 convenience stores. According to Wilkins Kennedy, Morrisons now plans to add 100 convenience stores a year.

Anthony Cork, partner at Wilkins Kennedy said that big supermarkets' financial power allows them to buy up the best inner city locations, which combines with their ability to price “very aggressively” against other stores.

Independent convenience stores are likely to face further pressure if an expected price bidding war starts between major firms as a result of the rise of “deep discount” supermarket groups, such as German-owned Aldi and Lidl.

Cork said, “Unfortunately, many independent convenience stores struggle to match the quality of product of bigger retailers because they lack the scale of purchasing and logistics.”

“Whilst the boom in the housing market and the overall recovery is helping big ticket retailers and DIY shops it does less to help the typical small-scale food and drink retailers.”

Ellie Clayton

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