Britain’s wet weather across April-June compounded the retail sector’s woes as there was a 10.3% rise in high-street collapses in the quarter, research has shown.
A study, completed by PricewaterhouseCoopers (PwC), revealed that the number of retail businesses falling into insolvency increased to 426 during this period, including a number of high-profile brands such as Game, Clinton Cards and Julian Graves.
Researchers noted that although the number of firms falling into difficulties in this sector have increased in each of the past four quarters, the wet start to the summer intensified these problems.
With recent trends showing that shoppers were already starting to be more careful with their purchases by seeking out discounts and buying only essential items, the wet weather meant many just stayed at home do dodge the rain and spending at the same time.
This has hit traders who would normally be able to bank on business from people looking to buy seasonal items such as summer clothing.
Although the retail sector has been hit hard by the conditions, results showed that other sectors such as manufacturing and construction actually saw a 3% fall in insolvencies compared to this time last year.
It is thought that this could support suggestions that perhaps the 0.7% fall in gross domestic product (GDP) could be overestimating how severe the double-dip recession is.
PwC retail specialist Mike Jervis said: “There has been a clear reduction in the incidence of insolvencies over the current recession compared to previous ones, but retail is the sector which keeps bucking this trend.”
He explained that with more shoppers being drawn to the convenience of online purchases through operators such as Amazon, many retailers are finding it hard to adapt.
In recent weeks large brands such as Halfords, Mothercare and JJB Sports have all posted poor results as a result of the rain which lashed the country at the start of the summer.
British Retail Consortium director-general Stephen Robertson highlighted the importance of the retail sector, which employs three billion people in the UK, stressing that it will have a knock-on effect on other sectors.
Speaking to the BBC Radio 4 Today programme, he said: “It’s fair to observe that retailers have been pretty robust through these really difficult times.
“If we are stopping shopping, if we’re stopping constructing shops, what we will find is other sectors are hit – transport, construction, for instance.
“There are huge links between what we see in a robust retail sector and the rest of the economy.”