David Alexander

The firm has analysed data from the Insolvency Service and found that businesses falling into insolvency in Scotland reached 274 last year. This was the second highest figure in a decade (the highest was 2012 when 315 businesses went bust) and was 9.1% higher than 2018.

The figures cover business failures in retail, restaurants, pubs and bars, and those involved in real estate activities indicating that the High Street was in trouble long before the coronavirus pandemic happened.

The figures are 54.8% higher than the 177 recorded in 2010 and track a prolonged and progressive decline in fortunes over the last decade.

David Alexander, joint chief executive officer, commented: “It is clear that the Scottish High Street has been in trouble for some time, but these figures indicate just how much trouble it was in before this year. The aftermath from the pandemic will undoubtedly bring more sorrow to the centres of our towns and cities as the initial lockdown and subsequent measures will have had a disastrous effect on the viability of many businesses.”

“But the woes of the High Street in Scotland have been happening for many years. High rents imposed by intransigent commercial landlords, the over-supply and rapid expansion of restaurants in the casual dining sector, and the shift to online buying have all contributed to the decline and this situation has simply been exacerbated and accelerated by the pandemic.

“Some commercial landlords have become more placatory over rents since March but probably not enough to save many businesses; the growth in delivery companies and the expansion of outlets involved in takeaways has only increased the pressure on restaurants since the pandemic began; and our love affair with online shopping has increased exponentially over the last six months impacting severely upon retail and those involved in real estate activities.”

He added: “In all the traditional sectors visible on the Scottish High Street there has been a major shift in consumer sentiment, and it is incumbent upon those involved to respond positively to the changing marketplace. This does not mean that these areas are doomed but it does mean that businesses need to adapt. For retail and real estate there has been a major shift away from bricks and mortar premises to online and it is unlikely this will be reversed. These markets have resolutely shifted online and are unlikely to return to the way they were.”

“For the rest of the High Street in Scotland there must be a reinvention of how people use their city and town centres. Activities which cannot be completed online will thrive and grow as will those which provide a unique experience of being in the heart of our communities.”

“My own sector of estate and letting agencies has been slow to respond to the changes in consumer demand that has irrevocably moved future demand online. I do believe that the pandemic will force many companies in my sector to adopt entirely online strategies supported by local individuals and teams. Virtual viewings, as a concept, would have been laughed at a year ago but are now the norm. Our business has experienced a substantial increase in activity in the last four months with completed rentals up 30% in July alone and the number of new properties coming to our business achieving a record high after 40 years in the sector. All of this was done online, and our new landlords and tenants were happy to work this way.”

Mr Alexander concluded: “It is clear that many of the public have lost the taste for crowds and traditional ways of doing things. Whilst this may be temporary there are indications that working from home may become a more permanent way of operating for many businesses. This will require a rethinking of the way in which Scottish High Streets operate. This means not trying to replicate what is disappearing but thinking of new ways to deliver services and new methods of operating.

“Not all businesses can work online but those that can, should adopt this strategy immediately. The next few years will be tough, but they will be even worse if we don’t accept what has passed and find new ways of working which will bring people back to our city and town centres. Not in the same way they once existed but in a new, vibrant, and different way. Only by recognising a problem can you resolve it and only by confronting change can you adapt.”