Warning in UK as 1,400 retailers predicted to fail

Up to 1,400 retailers are expected to fail this year in the UK as the battered sector suffered its worst December for 30 years, it was warned today.

A last-minute dash to the shops failed to boost footfall figures for the month, while heavy levels of discounting hit retailers’ margins, retail consultancy Experian said.

Shopper numbers were 3.1% lower during December than they had been in the same month of 2007, despite a massive 12.8% jump in footfall during the last week of the month compared with the same period the previous year.

The group said 2008 had been an “annus horribilis” for retailers, adding that the “unprecedented” level of discounting this year had made comparisons with last year extremely difficult.

Jonathan de Mello, director of Experian, said: “The last-minute surge in shoppers came as a relief to retailers but for most it was not nearly enough.

“The boost in numbers was driven by massive unprecedented discounting all at the expense of retailer margins.

“There is no disguising the fact that 2008 has been an annus horribilis for the retail sector and there is little prospect of improvement in 2009.”

The group said there had been a 21% year-on-year jump in the number of retail insolvencies during 2008, with high profile casualties such as Woolworths, children’s wear group Adams and CD and DVD retailer Zavvi all calling in the administrators.

It predicts a further 440 retail businesses will fail during the first four months of 2009, with a total of 1,400 going under during the year as a whole.