Rent 'could force firms to wall'

More companies were reporting a fall in sales

Scottish retailers have said they could be forced out of business if the system of paying rent three months in advance is not changed.

Thursday is a so-called "quarter day" when rent is due on many shops.

Campaigners have warned that this latest bill on top of poor conditions on the high street could push many shops out of business.

The Scottish Retail Consortium wants a change to the system and says this quarter day could be the toughest yet.

Richard Dodds, a spokesman for the consortium,said: "A thriving retail sector is essential for the health of landlords and the wider economy. Boarded up shops are becoming commonplace.

"An unrealistic quarterly payments regime can only increase the pressure on hard-pressed retailers and the jobs they support."

Traditional days

Quarter or term days date back to at least the middle ages and originally marked a religious festival, such as Lammas or Whitsunday.

They are traditionally regarded as settling days for certain debts that are payable in quarterly instalments, such as farm rents and leasehold payments.

Everyone else gets paid in arrears, why should landlords get paid in advance Richard Rennie Burness Solicitors

In Scotland the four quarter days were revised under the Scotland Act of 1990 and fall on 28 February, 28 May, 28 August and 28 November.

Retailers have suffered badly during this recession with many big names, such as Woolworth and Zavvi going out of business.

Bruce Cartwright, who is an accountant with PricewaterhouseCoopers, said the quarter day system has made life hard for some shopkeepers.

He said: "Effectively going out in advance is one big lump sum irrespective of how much money the retailer is earning."

Signs of change

There are signs that retailers are moving towards monthly payment schemes.

Richard Rennie, who is head of property with Burness solicitors, said landlords were becoming much more understanding about the difficult situation many retailers are in.

He said: "Landlords are less likely to terminate contracts if a retailer gets into trouble, they would rather have a tenant paying monthly than no tenant."

The campaign to overhaul the whole system of quarter days is continuing throughout Scotland and has won support from some major retailers and trade bodies.