High-profile retailers such as House of Fraser and Poundworld have slumped in 2018 and the sector has lost tens of thousands of jobs this year alone.
Similarly, department store House of Fraser is planning to shut down dozens of branches to survive.
Toys “R” Us and Maplin also collapsed in the first half of 2018 and high street chains like Carphone Warehouse, New Look, Jamie’s Italian, Byron and Prezzo all cut hundreds of job as their commercial fortunes declined. The store closures look set to continue with Homebase recently sold for a pound and likely to have its store numbers slashed.
50,000 jobs lost on high streets this year https://t.co/kbUOh397eK
— Sky News (@SkyNews) July 2, 2018
A number of factors, including inflation in the wake of Brexit, declining consumer confidence and increased business rates have all been blamed for the sector’s downturn.
Earlier in 2018, a report from PricewaterhouseCoopers (PwC) found the number of high street openings in 2018 was the lowest it had been for seven years. Last year, there were more than 5,800 store closures in the UK’s high street sector, the most of any year since 2010.
Lisa Hooker, consumer markets leader at PwC, said: “Many retailers are increasingly feeling the impact of the acceleration of online shopping as consumers begin to feel more comfortable with the price transparency and reliability of delivery options offered by online players.
“Digital offerings are increasingly becoming make or break in areas like fashion, but also for banks, travel agents and estate agents – all of which closed a significant number of high street outlets last year. For these sectors, store closures are less driven by the market environment and more by bigger structural changes, as customers increasingly expect to interact with their service providers online or via apps.”
Zeif Hussain, a restructuring partner at PwC, added that UK high street retailers are facing “a perfect storm of issues” as they battle to compete with online competitors.
House of Fraser to close 31 stores with 6,000 job losses as CVA approved https://t.co/q9NTDpn6N3
— The Guardian (@guardian) June 22, 2018
Job losses at a British institution
Marks & Spencer is another UK retailer intending to close stores, with plans to shutter more than 100 outlets over the next four years. The closures will place hundreds of jobs at risk.
Its CEO Steve Rowe told the Daily Mail that increased business rates were a major factor in the store’s decline.
“The long-term effects of (business rates) are now a reality,” he said.
“Our Covent Garden store faced a rate rise of close to a half a million pounds in the year before it closed, an untenable position for any retailer.”
Marks & Spencer to close 100-plus stores by 2022 in ‘radical’ plan https://t.co/q5JylgWT4W
— The Guardian (@guardian) May 22, 2018
The average business rates bill for a department store in England or Wales has risen some 26.6% this year following the government’s re-evaluation of the fees in 2017.
Trades Union Congress General Secretary Frances O’Grady called on the UK government to do more to assist the ailing sector.
“Retail depends on customers having money in their pockets,” she said.
“One reason why some shops are struggling is because wage growth has been very weak. Government needs to up its game, boost the economy and invest in great jobs that people can live on.”