With the beleaguered retail sector seeing a number of post-Christmas casualties, shops in Yorkshire are continuing to perform relatively well compared with some parts of the UK, according to the latest research from insolvency and restructuring trade body R3.
In March, levels of Yorkshire shops at higher than normal risk of insolvency saw a rise of just 3% since the previous month, lower than the average month on month increase across the UK which was 3.4%. However, retail continues to be a high risk sector with over 5,100 of the nearly 14,000 active retail businesses in region in the overall negative band. This equates to 36.9% of shops in Yorkshire, slightly higher than the national average of 34.2%.
Retail in Yorkshire did fare better than in some other regions with the South West (39.1%) and the North East (37%) having the highest levels of retail businesses at higher than normal risk of insolvency. Of the 12 regions surveyed, those which put in the strongest retail performance were London with only 29.7% of shops at higher than normal risk, followed by Northern Ireland with 30.5%.
“This is always a particularly tough time in retail as shops face the first rent quarter together with the largest VAT liability of the year,” explains Eleanor Temple, chair of R3 in Yorkshire and barrister at Kings Chambers in Leeds. “Unfortunately, this year, shops have also suffered from relatively poor Christmas trading and January sales as consumers appear to be holding on to what little disposable income they have amid Brexit fears and the failure of wages to keep up with inflation.”
She continues: “Already, we’ve seen a couple of high profile retail administrations as well as others showing signs of distress as the high street re-balances itself in the wake of the continuing huge growth of e-commerce and consumers’ changing shopping habits. These factors have combined to create a perfect storm for bricks and mortar shops. Against this backdrop, Yorkshire retailers are putting in a fairly robust performance with new city centre developments such as Trinity and Victoria Gate in Leeds continuing to prove popular attractions.”
R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.