High costs, low profitability, and losing sales to online shopping are just some of the factors affecting physical store owners. As a result, 2019 was one of the worst years for UK high streets that saw a total of 143,100 jobs lost according to figures from the Centre for Retail Research (CRR).
Retail in crisis
Professor Joshua Bamfield, a Director at the Centre for Retail Research, said “retail was in crisis” caused by high costs, low profitability, and losing sales to online shopping adding “these problems are felt by most businesses operating from physical stores, in high streets or shopping malls. The low growth in consumer spending since 2015 has meant that the growth in online sales has come at the expense of the high street.”
38,103 jobs were lost through retailers falling into administration whilst a further 26,462 jobs being lost through Company Voluntary Arrangements, a controversial insolvency procedure used to close loss making stores.
A further, 78,563 jobs were lost through “rationalisation” as part of cost cutting programmes by large retailers or small shops simply shutting for good.
The total number of overall retail jobs lost in 2019 was up by more than a fifth on the 117,425 overall jobs lost during 2018.
Whilst overall retail sector job losses were up by 25,703, compared with 2018, job losses at small independent retailers fell 22% from 55,030 in 2018 to 42,985.
Since 1st April, small independent retail premises in England have seen their business rates slashed by a third, with the discount being increased to 50 percent next year, but Professor Bamfield said “rates are a problem facing the whole retail sector – giant companies as well as minnows: they all need help if the high street is to not only survive but thrive.”
Robert Hayton, head of U.K. business rates at the real estate adviser Altus Group, said the average small shop in England saved 3,201 pounds in business rates this financial year which will increase to 4,880 pounds next year adding “whilst the headline grabbing measures taken by Government seem to be working for small retailers, they ignore the plight of large retailers abandoning the huge numbers of employees that rely upon them.“
The Centre for Retail Research say, without further Government intervention for large retailers, they expect job losses to top 171,000 in 2020.
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