West Midlands one of the worst areas for shop closures

THE West Midlands is one of the worst areas in the UK for shop closures, new figures have shown.

The number of retail closures in the region totalled 694 in 2012, a net increase of 295 on 2011, according to data compiled for PwC by Local Data Company.

The figures underline the report from LDC earlier this month which indicated the West Midlands had seen the largest rise of unoccupied units anywhere in the country.

The region’s vacancy rate was said to be 18.5%, while in Dudley – the town closest to the giant Merry Hill Centre – it is as high as 32%.

However, the new figures also show the number of store openings in the West Midlands increased slightly last year compared with 2011 – up from 416 to 429 in 2012.

Overall, however, the number of store closures outnumbered store openings by 265 during the course of last year.

Matthew Hammond, partner and business recovery specialist at PwC in the West Midlands, said the findings were to be expected due to the challenging economic conditions, which have forced retailers to re-think their strategies for growth.

“The market has shifted dramatically over the last 12 months and many of the closures have been the result of two problems – too many stores and too little sub-tenant activity. Retailers are opting for store closures rather than sub-letting them to other occupiers when the head lease is up for renewal,” he said.

“While the figures are disappointing, we have to acknowledge that today’s customer does not differentiate between where they heard about, researched, saw, purchased or returned a product. They expect to be able to carry out the shopping transaction from any channel. This is the age of the total retail experience and it demands a very different operating model to be successful.”

Some retail sectors are performing better than others. Among the risers, the data reveals that supermarkets, coffee shops, charity shops, pawnbrokers and pound shops are performing strongly. The fallers include banks and financial institutions, recruitment agencies and womenswear, gaming and card retailers.

Andy Lyon, partner and retail expert at PwC in the Midlands, added: “Consumers are continuing to spend their money wisely and shop around for the best quality and value. Convenience is also a key factor, especially as an increase in mobile technology devices has led to a steady rise in online purchasing. For this reason, online retailers and convenience stores, such as those being opened by the major supermarkets, continue to perform strongly.”