This year Coventry is set to have a number of large scale retail development schemes – including the £50 million redevelopment of Bishop Street in the city centre.
This could mean small and medium size enterprises (SMEs) are at greater risk of losing out on business. Business recovery specialists Cranfield are highlighting the threat this poses to city centre businesses already feeling the effects of the recession and the continuing rise in consumers purchasing online.
The Bishop Street regeneration programme alone includes proposals for a superstore of 125,000 feet, car parking facilities for 585 vehicles, a gym and leisure facility, pedestrian boulevards, special vehicle access from surrounding roads and a link to the canal basin – all features that can take business away from smaller retailers and direct it instead to the new retail hub. With the influx of supermarket superstores in major city suburbs like Cheylesmore and Stoke it can be easy for smaller chains to be forgotten by the general shopping public.
It is not just small businesses that are at risk as the retail sector in general has been hit the hardest by the economic downturn, with many large high street companies such as Peacocks, Bonmarche, Hawkins Bazaar, Pumpkin Patch, Blacks Leisure and La Senza having already gone into administration.
With this is mind, Cranfield are advising companies to seek professional advice as the need is greater than ever for smaller traders to be aware of the signs of distress. There are some key indicators specific to the retail sector such as reduced footfall, decreasing spend per customer or reduction in the number of units sold per transaction. This all leads to pressure upon the Profit margin with discounts and sales almost becoming the norm, all of which lead to cash flow difficulties.
Tony Mitchell, managing director of Cranfield Business Recovery, said, “As a result of these retail development schemes and the focus being taken away from the traditional high street, coupled with the difficult economic trading conditions, we are seeing an increase in the number of independent retailers seeking advice.”
The pressures from all sides on retailers of all sizes does not seem to be abating and unless smaller retailers adapt to changing markets and keep a tight control on their businesses, they are likely to join the high street brands we have lost recently. We advocate taking action as soon as retailers see any signs of distress. ”