Yorkshire and Humber’s high streets are continuing to face a challenging retail environment, with the latest research from insolvency and restructuring trade body R3 showing that in September 2019 the level of physical shops at higher than normal risk of insolvency in the region was once more above the average across the UK as a whole. However, levels of bricks-and-mortar stores at higher than normal risk had again decreased slightly in the region since the previous quarter.
In September 2019, the percentage of shops in Yorkshire and the Humber which were deemed to be at elevated risk of insolvency in the next 12 months was 42.5% compared with the national average of 40.6%. Three months earlier in June, the regional level was 44.1%, again higher than the UK-wide figure of 41.6%. However, the rate of retail distress does appear to be slowing both regionally and nationally each quarter since the start of 2019 (for the quarter ending March 2019, 44.2% of stores in the region were at higher than usual risk; across the UK the figure was 41.9%).
In the most recent research for September, nearly 4,400 of the 10,300-plus shops in Yorkshire and the Humber were deemed to be at higher than normal risk of insolvency. Nationally, more than 59,700 of the 147,200-plus physical retail businesses were considered to be in the enhanced risk category.
Looking at the different types of retail businesses in Yorkshire and the Humber monitored by R3, home furnishings stores again showed the highest levels of companies deemed to be at higher than average risk (42.1%); followed by motor retailers (38.6%); market stalls (37.2%); clothes stores and shoe shops (both 37.0%); and book shops (36.3%).
There was a mixed picture nationally with the strongest performances from physical shops in London (36.7% at higher than normal risk), the East of England (37.7%) and the North West (39.3%). In contrast, the South East and the South West both had 44.8% of shops at higher than normal risk, followed by Wales (43.8%) and the West Midlands (42.8%).
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, said: “Despite mounting gloom on the high street, with more cases of high profile retail struggles, levels of distress do appear to be stabilising. We have seen slight quarter on quarter falls in levels of higher than normal insolvency risk in retail throughout 2019, both here and nationally. In fact, Yorkshire and the Humber appears to be holding its own in the sector compared with other regions of the UK.”
Ms Temple continued: “It is worth noting that although the increase of internet shopping is often cited as one of the key factors in the demise of the high street, levels of above-normal insolvency risk are also relatively high for online retail business.”
In the latest quarter, 40.1% of online retailers based in Yorkshire and the Humber were recorded as being at higher than usual risk of insolvency, representing nearly 1,300 businesses. The figure for the UK overall was 34.9%, or just under 19,200 businesses.
Eleanor Temple concluded: “Dwindling consumer confidence amidst ongoing Brexit worries and a slowing global economy are partly to blame for falling sales on the high street. The key, as ever, is for retail businesses to seek professional advice at the first signs of financial distress when the most options will be open to them.”