Retail

UK Hit By Retail Crisis As 140K Jobs Lost, 16K Stores Shutter

U.K.’s high streets have been hit with the hardest times in a quarter of a century with the closure of 16,000 stores this year and 140,000 jobs lost, according to reports.

According to a study by the Center for Retail Research (CRR), More than 2,750 jobs were lost every week — about 61 every working day. The study also said that without further government intervention, job losses in retail could hit 171,000 next year.

“These problems are felt by most businesses operating from physical stores in high streets or shopping malls,” said Prof. Joshua Bamfield, director of the CRR. “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.”

Roughly 78,600 layoffs were a result of store closings as eCommerce escalates along with the expense of running physical stores. Another 38,100 jobs were lost as companies went out of business. Some 26,500 job losses were part of what are called company voluntary arrangements, or CVAs.

The U.K. government said it would increase retailers’ discounts in England and review the tax to lower overall rates. On average, a small shop in England saved £3,201 in business rates and that is slated to increase to £4,880 pounds in 2020. 

“Whilst the headline-grabbing measures taken by the 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,” Robert Hayton, head of U.K. business rates at Altus Group, told The Guardian.

Retail is still the U.K.’s largest private-sector employer with about 3 million employees. A study by the think tank RSA Future Work Centre said the drop in retail jobs runs counter to the record levels of employment as laid-off workers head to restaurants and hotels. The study showed a near 78,000 increase in care workers.

The U.K.’s Labour party said in August that it wanted to allow local authorities to take over vacant properties in an effort to give the country’s retail market a boost.

Around 11.8 percent of stores around the U.K. are currently vacant, according to the Local Data Company. In some towns, the rate is over 20 percent, with the highest figure coming in at 33 percent. An estimated 29,000 retail units have been vacant for 12 months.

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