3 key changes to the UK high street in 2019
This year, it seems that hardly a month goes by without news of another wave of shops shutting, or of stores losing money.
Nearly 3,000 shops shut on UK High Streets in the first half of 2019. So, what's behind the crisis?
1. We (the consumer) are changing
With the rise of online spending, consumers now spend one in every five pounds online. As a result of this, therefore, retailers will suffer 20% fewer sales from the brick-and-mortar shop floor environment.
This, coupled with the fact that fixed costs, including rent, wages, business rates, regulatory costs relating to GDPR, are rising considerably, then profit margins will inevitably be squeezed.
Many retailers have failed to adapt to these changes, for example, Debenhams, whose previous owners had tied the department store into long leases, thereby suffering debts.
The first half of the year saw a net decline of 1,234 chain stores on the British high street. Britain has moved away from the traditional retailing of large department stores, with consumers spending more of their disposable income on vaping, takeaways and gyms, and therefore more stores opening in these categories.
2. We have lost some big names
Last year, big, and well-loved chains, such as Toys R Us, Maplin and Poundworld, went bust and vanished altogether.
Others such as Homebase, Mothercare, Carpetright and New Look when through restructuring deals with their landlords, and closed hundreds of shops between them.
In fashion, brands such as Karen Millen and Coast have announced closures. In July this year, the proportion of shops that are empty reached 10.3%, which is the highest it's been since January 2015.
3. Decreased footfall has led to job losses
With footfall lower than ever, this has resulted in a loss of 106,000 jobs from March 2016 to 2019 according to the British Retail Consortium.
Due to plunging profits at Sir Phillip Green's Arcadia Group, 1,000 jobs were lost, and 100 redundancies were issued at high-end fashion retailer LK Bennett.
Poundworld saw the biggest job losses, with more than 5,000 redundancies. Toys R Us and Maplin also lost 5,500 jobs between them.