Insolvency body calls for quarter day reforms to help struggling retailers
INSOLVENCY trade body R3 says replacing the traditional three months’ advance payment with a monthly option could be crucial in the struggle to help high street retailers compete with online rivals.
The suggestion comes on the back of figures published by the Office for National Statistics showing that the value of UK online sales rose by 10.3% last month from May 2012, whilst the total value of UK retail sales rose by only 3.1% over the same time period, highlighting the growing threat of the internet to ‘shop window retailers’.
An R3 spokesperson said: “These are the first real growth signs we have seen across the retail sector for a considerable time, but for those businesses relying on a physical high street presence, the quarter day deadline could prove one burden too many when it comes to remaining competitive with e-commerce.
“Many high street retailers will have long-term leases which were agreed in more positive economic times. Coupled with the meteoric growth of online retail, the size of quarterly rent bills means this is a dangerous period for some businesses in a sector which is just starting to turn a corner.
“The last thing we want to see is more empty shops, with more landlords out of pocket.
“Business owners could discuss paying rent on a monthly basis, or even negotiating turnover-linked rents to help them manage their cash flow more effectively.”
