Why are high street retailers suffering?

Why are high street retailers suffering?

Another day, another high street retailer goes insolvent. It feels a bit like that at the moment, with Jessops, HMV and today Blockbusters all entering administration in the past week and Comet going the same way at the end of 2012.

We spoke to Mike Jervis, partner at PWC, about the current state of the UK High Street.

Why are high street retailers finding it so hard at the moment?

There are a number of reasons the high street is struggling, these include:

  • consumers have less disposable income, fear for their employment, spend less—there is real evidence that volume growth has stopped (they also want the convenience of on-line)
  • retailers in many cases have too many stores, too much fixed cost—the costs of running stores has grown at a higher rate than the top line (rents, rates, wages)
  • struggling retailers not devloping a viable online offering
  • technological or socio-economic changes marginalising certain categories—eg music online, greeting cards etc

In recent months, it seems to be specialist retailers (ie Comet, Jessops and HMV) entering administration. Why are they finding it hard co

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