Written by: Keith Tully
Retailers across the UK have collectively accumulated rental debt worth as much as £2.9 billion, according to the British Retail Consortium (BRC).
The organisation is warning that there could soon be thousands of shops being closed nationwide unless some action is taken to protect the associated businesses from their creditors later in the summer.
From the beginning of July, the moratorium on aggressive debt collection among commercial landlords will no longer be in effect and pressure on retailers is expected to increase significantly as a result.
Indeed, the BRC’s latest figures suggest that more than two thirds of retailers could be facing legal cases in relation to their debts once that moratorium on aggressive creditor actions has been lifted.
Close to a third of retailers (30 per cent) say they have already faced a County Court Judgement (CCJ) in relation to rental debts and around 80 per cent say their landlords have given them less than a year to pay back the rent arrears they’ve accumulated during the pandemic.
The BRC is calling on the government to offer clarity and reassurance regarding the rights and responsibilities on retailers who are in rent arrears and their landlords once the moratorium on aggressive debt collection has ended.
However, according to the BRC, it is clear that a significant number of retailers across the country are currently facing a battle to remain financially solvent and viable even after Covid-19 trading restrictions have been lifted.
Helen Dickinson, the BRC’s chief executive, has described many retailers as having “taken a battering” during the pandemic but zhe’s also insisted that the sector as a whole wants to play its part in reinvigorating the UK economy.
Her view is that to do so, retailers will need to be granted a degree of financial breathing space in order to survive in the short term and to return their cashflows to more manageable levels.
“Government must ringfence the rent debts built up during the pandemic,” Ms Dickinson has argued.
“With this in place, all parties can work on a sustainable long-term solution, one that shares the pain wrought by the pandemic more equally between landlords and tenants.
“Without action, it will be our city centres, our high streets and our shopping centres that suffer the consequences, holding back the wider economic recovery.”
17th September 2021
Sales across the UK’s retail sector fell in August for the fourth consecutive month, according to the latest figures from the Office for National Statistics (ONS).Read More
9th September 2021
High levels of debt are causing significant concerns for decisionmakers at small and medium-sized enterprises around the UK, according to a new piece of research.Read More