The number of retailers that fell into administration during 2010 was significantly lower compared to the previous 12 months, research from the Centre for Retail Research has found.

In 2008 and 2009, 54 and 37 companies failed respectively, only 26 companies experienced a similar fate in the last 12 months.

The Centre for Retail Research (CRR) suggests that 944 stores and 10,390 employees have been affected by businesses failing, a significant number which is however, still more favourable that compared with the last two years.

Among the companies that went into administration in 2010 were Faith Shoes, whose £14 million debt is now under control of retail restructuring experts Hilco, and fashionwear chain Envy!, which is understood to be considering continuing in a reduced format.

A separate study, conducted by the CRR and online shopping comparison site Kelkoo this week indicated that difficult times are ahead for the UK retail industry.

The study predicts that consumer spending will decrease by 0.5% year-on-year during the first quarter of 2011, with the VAT increase to 20% expected to cost each UK household an average of £520.

Professor Joshua Bamfield, Director of the CRR, told the magazine Retail Gazette “ It has been difficult to find companies that are going bust this year, which is quite good news.

“The retailers that have survived the tough 2008-09 period are credible businesses and are now being careful.”

He added “ Independents and multiples will close stores, with some of the larger businesses reducing their network stores by 10-15%, partly because of the growth of online retail and partly due to consumer spending reducing.”

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com