Chains struggle to keep up with store rent hikes

Rising retail rents are piling pressure on retailers as sales at some stores average out at less than rents being demanded.

According to researcher Verdict, the shortage of prime locations has pushed rents up, and many properties in London's West End cost about£480 per sq ft (£5,166 per sq m).

'This is higher than the average sales per sq ft of£368 per sq ft (£3,961 sq m) recorded by the top 20 womenswear retailers,' Verdict pointed out.

Although London shops may generate higher than average sales, the data highlights the rising costs faced by retailers.

Verdict chairman Richard Hyman said: 'Everyone on the high street is having to run much faster. Negative inflation is a huge challenge for retailers. They aren't able to put prices up, but are seeing costs go up by 3 or 4 per cent a year, which is putting downward pressure on margin.'

Despite cost issues, the high street is holding its own, with retailers generating sales of£122.7 billion last year, accounting for 49.1 per cent of consumer retail spend. Ten years ago high street spending accounted for 50.8 per cent of total retail spend.