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Since our last update, and indeed since the start of 2015, there have been two administrations recorded on SnapShop – Bank and USC – with Austin Reed announcing a Company Voluntary Arrangement and store closures.
Looking back over the past three years, the first quarter has been consistently the biggest period for retail failures, and it is believed that 2015 could see even more companies collapse:
There are several reasons why January is notorious for this - retailers who may have been struggling prior to the festive period will most likely have been given a period of grace to turn performance around. Banks and suppliers will be watching like hawks, poised to pull the plug if and when they sense that hasn't happened. The quarterly rent date occurs on December 25, and VAT is due on January 31, meaning it is a particularly punishing time for cash flows.
December on the whole marked a positive end to 2014 despite having seen its slowest month of growth since 2008. Figures from the BRC-KPMG Retail Sales Monitor show that retail sales edged up 1% on a total basis. Sales on a like-for-like basis, however, were down 0.4% as Black Friday pulled forward some festive sales into November.
New figures from the IMRG Capgemini e-Retail Sales Index revealed that online sales grew by 14% to £104 billion in 2014. The figures also show that annual online spending broke the £100 billion barrier for the first time. For 2015, IMRG and Capgemini are forecasting growth of a further 12% with total online sales estimated to be worth £116 billion by the end of the year. In the eight weeks to 27 December, UK shoppers spent £21.6 billion on gifts and bargains which was 13% more than the same time last year.
Global Blue has revealed that international spending from tourists in the UK reached the highest level on record for December in 2014, breaking the previous year’s record by rising a further 11% on the 40% year-on-year increase seen in December 2013.
Further highlighting the success of 2014, research by CBRE revealed that investment in UK shopping centres had reached its highest level in nine years. In 2014, £5.6bn of investment transactions were completed in the UK shopping centres, an increase of 33% on the £4.2bn transacted in 2013 and well above the ten-year average of £4bn per annum. 2014 saw some landmark transactions with the largest deal being Land Securities’ £656m purchase of Lendlease’s 30% stake in Bluewater.
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