Retailers are predicted to reduce their store numbers and focus more of their efforts online, despite a reduction in the number of retail administrations in Q3, according to global financial advisory and investment banking firm, Duff & Phelps.
Commenting on the latest figures for corporate administrations issued by The Insolvency Service, Philip Duffy, partner at Duff & Phelps, said: “The formation of the Distressed Retail Property Taskforce, whose first priority will be to find out how big the problem of retail property indebtedness is across the UK, is a clear indicator the current state of the British high street is not a cyclical occurrence.
“The trend of shop closures may be in part driven by cost, but more so by online clicks. And we would expect to see larger retailers scaling down their property portfolio and focusing more on their digital offering to ensure consumer loyalty going forward.”
Despite the continued gloom on the high street, retail showed a further reduction on administration appointments from 52 in Q2 2012 to 32 for Q3 2012. Overall corporate administration figures dropped for the second quarter running from 625 in Q2 2012 to 548.
Duff & Phelps said this is welcome news and, coupled with the latest GDP data for the third quarter coming in higher than expected at 1%, according to figures from the Office of National Statistics, signals Britain is officially out of a double-dip recession.
Duffy said: “Despite the recent spate of high profile high street closures and the swathe of empty shop fronts appearing across UK high streets, retailers have been taking heed of the emerging breed of consumer and are adapting accordingly – understanding today’s consumer has increased the pace of online shopping from the desktop to mobile devices. For ease, consumers are using technology at hand to research the best deals available without hitting the high street.