Electronic screen supplier Rhino Media Group (RMG) is on the verge of collapse, potentially leaving retailers in thousands of pounds worth of debt, a source has confirmed.

At the start of the year, RMG took on the customers of collapsed screen supplier The Shoppers Network. Under the agreements, store owners paid an average of £255-£300 per month to lease screens under contract with various third-party financial providers. These costs were offset by monthly airtime payments provided by RMG, whose business model worked on selling space on the screens to advertisers.

However, a source close to the company confirmed that RMG was unable to make the scheduled payments last month due to an inability to generate sufficient interest from advertisers, leaving stores struggling to pay the lease fees. The missing payments have affected 500 retailers with five to 18 months left on their existing contracts, 150 of which are convenience stores.

Read more: Newsagents can tackle sales decline by using digital strategies

The source said: “RMG’s funds and resources have got to the end of the money and they can’t pay them [the retailers]. They haven’t made any money and one option is for Rhino Media Group to walk away and liquidate.”

betterRetailing understands that meetings were due to take place with groups including Booker to try to work out alternative arrangements, such as retailers with screens securing local advertisers and paying RMG a share of the fees.

A source said this could cover part of the costs retailers are contractually obliged to pay the leasing companies and continue to help generate sales and additional footfall. However, they stressed it would be unlikely to cover the full monthly costs retailers owe.

The source also alleged that Rhino Media Group is trying to help retailers escape their leasing agreements.

The news comes just three months after RMG alleged the NFSP agreed a deal RMG said was worth £5m to allow post office retailers to buy cheaper digital screens. Yankee Candles, MoneyGram, Specsavers and One4all had all expressed interest in advertising on the screens installed through the deal in post offices. The NFSP confirmed the agreement did not include payments from the NFSP to RMG.

Read more: New app helps reduce wastage

Vas Vekaria, of Premier Lever Edge Convenience Store in Bolton, advised retailers can avoid similar issues with screen leasing by using their own equipment to advertise products. He told betterRetailing: “I have three screens in my store which cost £300 each, but you can use cheaper ones as long as they have a USB port. You need an old iPhone or iPad and an Amazon Fire TV Stick, which costs £30, into the screens.

“You start by making your own promotions by finding product shots online. Upload the images to iMovie software installed on the old iPhone or iPad. iMovie lets you add text highlighting your promotions.

“You then save them as a slideshow in iMovie once you have several images created. The iPhone or iPad has a function called Airplay, which lets you stream the slideshow on the TV through the Fire Stick. It’s simple and any retailer can do it.”

Read more: JTI Advance retailer website unveils new features