BRC reports show common factors affecting retail company insolvency rate

Published on January 25, 2013 by Crawfords Accounting

The company insolvency rate in the retail sector is suffering from a combination of effects that can be spotted in several recent reports from the British Retail Consortium.

First, the BRC reported a fall in the number of High Street shoppers, which stood down by 1.2% year-on-year in December 2012.

BRC director general Helen Dickinson added, however, that the average spend per shopper was up, offsetting the lower level of footfall.

Secondly, retail crime levels have climbed by 15.6% in the past year, and now cost the sector £1.6 billion each year.

The average shoplifter now takes £109 of goods in each incident, with around £200 million stolen in two million separate instances of shoplifting each year.

Finally, the BRC reports that employment in the retail sector actually rose slightly in the fourth quarter of 2012, up by 0.6% compared with the previous year.

But this is not an indicator that all retailers are safe, as headline-grabbing company insolvency stories have shown in recent weeks.

The actual number of retail outlets is down by 3.6% year-on-year despite the increase in employment – indicating that individual insolvencies are still a risk factor in spite of the overall strength of the retail jobs market.

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