What is the future of retail?

 

It’s a sorry sight looking around some of the UK’s towns and cities. ‘To Let’ signs everywhere following the collapse of not only independent shops, but also some of the biggest names in retail. This year has seen high street chains including House of Fraser, Homebase and Poundworld go into administration, as well as many others.

Why?

The answer seems so obvious – online shopping. When you can get almost anything you want from Amazon, why bother hitting the shops? Benefits of buying online include:-

  • Being able to shop from the comfort of your sofa
  • Cheaper prices
  • Not paying expensive parking charges
  • Wide choice of goods
  • Having everything delivered

Recent research from Qualtrics shows that 41% of retail workers rarely look forward to going to work, so unhappy shop workers may also be having an effect!

Any other contributing factors?

  • Pricey high street rents
  • Less staff costs
  • Rising overheads
  • Consumer decrease in disposable income – 48% of UK employees regularly borrow in order to meet basic financial needs (Neyber)

What is the result?

Simple – redundancies. In July it was reported that retail workers account for approximately 50,000 of job losses this year.  Data from turnaround specialist firm Alvarez and Marsal shows that the number of UK companies filing for insolvency is expected to grow each year, especially within the retail sector.

What can be done?  Some suggestions…

  • Increase taxes for online retailers
  • Reduce business rates
  • Provide free parking
  • Increase transport links
  • Rent incentives for independent retailers

Whilst these may not all be possible but worth looking into.

On the plus side…

6 high street retailers defying the odds:-

Here at Breathing Space HR we are experts in handling redundancies. Should you find your company is at risk of having to make job cuts we would be happy to help.