Retail failures fell last quarter but fail to improve from 2011

Kasmira Jefford
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THE NUMBER of UK retail failures showed no sign of abating in the first nine months of the year, as retailers continued to struggle against a tough economic backdrop and weak consumer spending.

Figures from accountancy firm Deloitte show that although retail administrations fell in the third quarter – from 33 last year to just 28 – it was not enough to improve numbers for the year so far, which remain unchanged on last year at around 136.

“The decline in the number of retailers falling into administration is positive news,” said Lee Manning, restructuring partner at Deloitte, but added: “You can’t look at just one quarter alone. The figures are flat compared with the first nine months of last year.”

JJB Sports became the latest retailer to throw in the towel last month after failing to secure enough funding to turn itself around.

Nevertheless, recent figures from the Office for National Statistics show that inflation fell to 2.5 per cent in August, easing pressure on consumer spending, particularly on non-discretionary items like household goods and food.

“Whilst this has yet to translate into stronger spending on discretionary items, there is cautious optimism for next year when wage growth is poised to outstrip inflation, providing a boost to spending power,” Manning added.

“The real test will come in January once the busy Christmas trading period is over.”