Statistics from the Centre of Retail Research (CRR) show nearly 6,000 UK store multiples have closed in 2019 till now, implying the UK retail sector is in crisis, unable to cope with high costs, low profitability, and losing sales to online shopping. These problems are being faced by most businesses operating from physical stores, in high streets or shopping malls.
The country witnessed 18,344 store closures in 2018.Statistics from the Centre of Retail Research show nearly 6,000 UK store multiples have closed in 2019 till now, implying the UK retail sector is in crisis, unable to cope with high costs, low profitability, and losing sales to online shopping. These problems are being faced 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 comes at the expense of the high street, CRR said on its website.
The high costs of running retail outlets, including rents, business rates and high labour costs is a thorn in the side of many stores and retailers. High costs, slow growth in sales, squeezed profit margins and heavy price competition means companies struggle to stay in business let alone achieve healthy profits.
The rapid growth of online competition showed 2018 online sales accounted for around 18.4 per cent of total retail merchandise sales, with much of online growth achieved at the expense of brick-and-mortar retailers.
Low investment in stores and weak forward planning to meet the challenges in a new era of retailing has impacted profitability.
The dire results confirm the crisis, with 9,750 independent retailers going into administration, and 753 were victims of rationalisation, which resulted in a total closure of 10,503 independent stores in 2019 till now.
A total of 130,148 jobs have been lost in the sector and 16,337 units have shut their doors altogether, the CRR stated.
“The retail crisis in jobs, businesses, stores and high streets has been coming for a long time. Retailers who sell from physical shops have found consumer spending and profitability has been hit hard,” cautioned the report.
Fibre2Fashion News Desk (DS)
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