Poundworld crashed into administration yesterday, putting more than 300 stores and 5,000 jobs at risk amid conditions described by analysts as the worst period for the high street since the financial crisis.
The total number of retail store closures so far this year will total 1,398 if Poundworld is forced to shutter at least 100 of its 335 sites, according to data compiled by the Centre for Retail Research.
Based on these figures, the retail sector has haemorrhaged 27,750 jobs already this year.
Professor Joshua Bamfield of the Centre for Retail Research said this put 2018 on track to be the worst year for retail since the height of the recession, with 10,000 store closures expected by the end of the year.
Poundworld’s founder Chris Edwards confirmed yesterday that he was trying to assemble a bid to save some 200 of the retailer’s stores.
But concerns are growing that a “toxic mix” has made the high street a death trap for retailers.
Richard Lim, chief executive of Retail Economics said: “It’s been the toughest year since the financial crisis and I think there’s a toxic mix of factors that are all hitting the sector at the moment.” He cited a softer consumer environment, higher operating costs, and the impact of online shopping.
“Those retailers with large property portfolios are not able to react fast enough to the structural changes,” he added.
Robert Hayton, head of UK business rates at real estate advisor Altus Group, said that the government must tax the digital economy in order to even up the playing field for bricks-and-mortar retailers.
“Internet retailing is convenient, but will lead to the substantial extinction of the high street if left unchecked,” he said. “Extra taxes raised from digital businesses could be ring fenced and invested in encouraging people back to our high streets.”
Meanwhile Diane Wehrle, insights director at Springboard, said the average decline in footfall so far this year is three per cent, the worst level since 2012.
“We will see a reduced number of stores,” she said. “Some will never come back into retail use and that’s quite shocking.”
Poundworld’s collapse yesterday made it the latest casualty of the retail sector this year, following the failures of Toys R Us and Maplin in March, while Fabb Sofas also fell into administration just last week.
The news also came just days after House of Fraser announced plans to close more than half its stores through a company voluntary arrangement (CVA). The process has been used by New Look, Mothercare, Carpetright and several other retailers this year, resulting in heavy store closures.