The number of retail pre-pack administrations will climb this year as the recession takes its toll, but fewer chains will disappear from the high street completely.
According to PricewaterhouseCoopers retail leader Mark Hudson, the “first sweep” of the downturn has “flushed out the weakest
retailers already”.
He said: “More stores will be lost to pre-packs in the next nine months, but fewer national and recognisable high street chains will shut their doors completely.”
However, PwC analysis showed that the disappearance of high street names such as Woolworths, MFI, Zavvi, Rosebys and The Pier means £3.6bn of sales is up for grabs.
Hudson said that “only the strongest and most focused retailers” will be able to seize market share. “Good retailers will see these failures as opportunities to gain share and do everything they can to harness them,” he said.
The disappearance of Woolworths from the high street has left a£1.7bn hole in the market, according to the report. MFI has left
£660m up for grabs and Zavvi£341m. Pre-pack administrations have led to a£400m hole because of jettisoned stores.
Hudson believes that value and entertainment retailers on the high street will benefit the most from the gap in the market, such as Wilkinson, Home Bargains and HMV. However, he warned against over-expansion.
“Now is not a good time to open stores and adding space willy-nilly is the wrong thing to do,” said Hudson. He added that expansion should not be ruled out for growing retailers, as long as it is conducted at a “sensible rate”.
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