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There has been one administration since our last update – Sphere and Turret. After struggling with financial difficulties it was announced in May that all 16 stores across central Scotland had closed. No further news on this has been reported.
Although this year has been quiet so far on the administration front, figures from FRP Advisory reveal that over 700 shops were shuttered last year with the loss of almost 5,000 jobs as a result of high street retailers such as Phones 4u, Jane Norman and La Senza falling into administration. Just 42% of the 1,270 shops that fell into administration last year were rescued, up from the 35% survival rate for stores in 2013. Back in 2011 there was a 67% survival rate for stores that entered administration.
Following April’s highest level of consumer confidence since 2002, GfK’s UK Consumer Confidence Index for May showed a decline of three points to 1, suggesting that the public are “not too confident about economic life under the Conservatives”. It will be interesting to see what the Index reveals next month.
Internet sales continued on their upward trajectory, recording their second consecutive month of double-digit growth in May according to the IMRG Capgemini e-Retail Sales Index. Total online sales increased by 10% year-on-year in May and by 2% on April.
Interestingly, UK retail accounts for 11% of global Internet retail sales, and the UK has the highest e-commerce spend per person of any country.
Online sales across the UK, US, Germany and China will grow by £320bn between now and 2018, increasing the value of the online market to £645bn, according to research by OC&C Strategy Consultants, PayPal and Google. Their research shows that Brits are currently spending nearly £1 in every £5 of their shopping via the web and the new survey suggests that ecommerce will continue to flourish. 59% of online sales are now through smartphones or tablets in the UK, in the US this number is 45% and in Germany it’s 24%.
According to Global Blue, international spend is back to strength for 2015 following a slowdown in growth last year, with London’s West End reaping the benefits. Spend in the West End is up 4% YOY to date, following a 3% YOY decline in 2014, as shoppers from top spending nations China, Middle East and South East Asia are shown to be spending over a third (38%) more in the capital’s top shopping district.
This is in contrast to the latest figures from the Office for National Statistics for the year to April 2015 which noted a drop in tourists from regions including Europe, the Middle East and Russia and showed the UK’s earnings from international visitors fell 7% to £6.7bn during the year.
However, Global Blue is predicting a significant uplift in Middle Eastern spend across the UK as shoppers flock for the annual pre-Ramadan rush. The figures show that spend from Middle Eastern nations climbed by 43% year-on-year over the rush in 2014 and the trend is expected to repeat this year. Saudi Arabian shoppers are forecast to lead the surge with spending up by 28% year-on-year to date with the Qataris expected to follow.
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