Nearly 100 retailers closed down every day in 2020 as record numbers of retail owners “cashed out of their businesses and cut their losses”.
A record 36,295 retailers ceased trading last year, rising 53 per cent compared to 2018, according to new research from UK ecommerce platform EKM.
According to the research, a large majority of these stores had a high street presence and ceased trading via members’ voluntary liquidations, which enable business owners to exit while their business remains solvent.
“Record numbers of shop owners are looking to take cash out of their businesses and cut their losses,” EKM’s chief executive Antony Chesworth said.
“In many cases these are people 10 years or more before retirement who are worried about how long the pandemic has dragged on and would rather not run up debts at this stage of their lives.”
“Under the circumstances, many shop owners are happy to surrender their leases and cease trading, even in cases where landlords offer rent reductions or rent-free periods.”
However, the number of stores shutting down over the period was exceeded by the number of retail start-ups launched, rising 42 per cent year-on-year to 62,245.
“We are seeing a flood of enquiries from people making their first foray into retailing,” Chesworth continued.
“We are also seeing enquiries from former employees of large retailers who have been made redundant and want to use their knowledge of retail to strike out on their own.
“These are overwhelmingly highly specialist retail start-ups, often aimed at the hobby market, where the retailer has a deep understanding of the product lines and can offer a highly personalised level of service to customers.”