Store closures and empty shops, the high street crisis continues

In July the Arcadia Group announced it would close 50 of its portfolio stores, including the once high street untouchables Topshop and Dorothy Perkins.

But the news hardly came as a surprise, as announcements of store closures, bankruptcies and companies going into administration are regular occurrences. See Karen Millen, Coast, House of Fraser, Boutique 1, Forever 21, Mothercare, Jack Wills, Debenhams, the list goes on.

Every day 16 stores are forced to close

An average of 16 stores shutter their doors every day in the UK, with 2,870 closures in the first half of 2019 according to research by PwC and the Local Data Company.

In July this year, the proportion of all shops that are empty grew to 10.3 percent, the highest level in five years since January 2015.

According to the BBC, the high street giants occupy 20 percent more store space than they need and can afford. Traditional retailers must find new ways of attracting customers to their bricks and mortar or develop multi-channel ways to keep up with changing shopping habits.

But as the high street tries to find its retail footing, costs for physical stores are rising. Researchers at A&M and Retail Economics suggest during the past five years, companies have had to spend 10.8 percent more on things such as business rates, increasing wages and rents, said the BBC.

The figures show consumers now spend one in every five pounds online - and if businesses are seeing 20 percent fewer sales on the shop floor as well as their fixed costs rising, then profit margins will be squeezed.

In September a campaign to Save our Shops was launched by USDAW, the official Union of Shop, Distributive and Allied Workers, to call for urgent government action to “protect retail jobs and the high streets at the heart of our communities.”

Scale of store closures is devastating

Over 74,000 retail workers lost their jobs during 2018 and the rate of store closures is at its highest in five years. The Save our Shops campaign urges the Government to protect the 4.5 million jobs that rely on the success of the retail sector. It also states the scale of store closures is devastating, not just for the workforce, but also for the greater communities and town centres.

The retail analytics company Springboard tracks footfall in main towns and cities and reported it has seen a decline in numbers for the past few years. From March 2016 to 2019, UK retail lost 106,000 jobs according to the British Retail Consortium (BRC). Those figures are based on data from the Office for National Statistics.

In September the BBC reported 262 new fashion retailers opened their doors in the first half of 2019. This is good news for brands and companies who have a unique product or service to sell. The bad news is for the conglomerates: there are too many stores in the UK that are simple too big and in the wrong locations.

Article source: BBC; image: Pexels