New business start-ups slow in 2015 - but so do store closures
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The number of business start-ups recorded in Scotland during the fourth quarter of 2015 (2,488) was down by nearly 17 percent on the previous quarter (2,990) and 2 per cent behind the same quarter last year (2,539), according to latest data from the Committee of Scottish Bankers.
Figures for the fourth quarter of 2015 for new business start-ups based in Scotland were based on those that have opened bank accounts with the contributing CSCB member Contributing banks, Bank of Scotland, Clydesdale Bank, TSB Bank and The Royal Bank of Scotland.
They showed the 2015 full year figure of 11,669 was 0.9 per cent behind the corresponding figure for 2014 (11,772).
Meanwhile, separate PwC analysis compiled by the Local Data Company (LDC), has revealed that the rate of store closures in Scotland fell slightly in 2015 in response to improving consumer confidence and the economic recovery but this good news was tempered by fewer store openings year-on-year.
The figures showed that 280 stores closed in Scotland while 221 opened – a net reduction of 59 shops.
Across the UK 5,138 outlets closed in 2015 compared to 4,640 openings, equating to a net reduction of 498 shops.
In every Scottish area except for Perth, more stores closed than opened as consumer spending and shopping habits continued to diversify. Edinburgh and Perth were the largest losers with a net change of -16 and -12 stores respectively.
Across the UK, this is the lowest closure rate in five years since the peak seen in 2012, when 20 stores a day were closing. It also represents the lowest levels of High Street churn - entries and exits – since 2010 as retailers moderate their response to shifting customer shopping habits.
sstores Jan 2015
Dec 2015
change
change %
(2014: 312)
(2014: 246)
Bruce Cartwright, head of business recovery services at PwC in Scotland, said: “Regulation continues to impact on money shops. With the notable exception of Brantano Footwear (where a number of stores were successfully preserved following sale out of administration) there have been fewer high profile closures.
“Taking an overview, closures are often part of a larger strategic picture where fewer leases are being renewed on expiry. For example, Dixon’s Carphone’s plan to merge their remaining PC World and Currys stores and additionally place Carphone Warehouse stores into these units as well, with the knock-on effect of Carphone Warehouse stores elsewhere closing.
“We do see some growth albeit many of these are small operations or franchises such as stores offering forms of vaping or e-cigarette advice. The likelihood is that this increase is a short spike rather than the beginning of a large, ongoing trend. On the other hand, the continued growth of the fast food industry shows Scots applying their disposable income in a familiar fashion.”
Top risers and fallers by business type in Scotland in 2015
Martin Cowie, head of private business at PwC in Scotland, said: “Tightening regulation in the financial sector for cheque cashing shops and similar has hit hard and the financial institutions continue to restructure, leading to more closures.
“Online shopping continues to play a major role in the changing shape of the high street – indeed we now see click and collect not only as an offering of the mainstream stores, but they’ve expanded their delivery network into local corner shops. The longer-term implications of this strategy are still to be revealed in terms of the impact it has on the smaller independent operators.”
Across Great Britain: openings and closures of multiple retailers by region across the top 500 GB town centres in 2015:
net change
Multiple openings and closures by region in 2015 (Source: LDC)
Matthew Hopkinson, director of The Local Data Company, added: “These numbers illustrate the improvement in consumer confidence, low interest rates and low inflation that characterised 2015. They also show how high streets continue to evolve from a pure purchasing environment to one of experiences, services and above all food and beverage consumption rather than primarily goods consumption.
“Whilst stability has returned overall for the chain retailers in our high streets the fact remains that they have continued to close more shops than they open and have done so since 2011 with out of town locations being a destination of choice for many with free parking, easy access and more space to service and deliver the experiences that the modern consumer demands.
“I expect the overall trend to remain the same as banks continue to close large numbers of branches, traditional comparison goods retailers rationalise store numbers and the fact that the current exceptional growth of food and beverage outlets is unlikely to continue at the same pace in 2016.”
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