High Street retail closures reach nearly 6,000

High street chains have closed almost 6,000 stores so far this year, according to the Centre for Retail Research, which also revealed that retailers with 10 or more stores have already closed 5,834 shops in 2019 – up 77% on the whole of last year.

Some 708 shops have been closed by large retailers falling into administration in the year to September 30, while a further 333 shops were closed through CVAs. In the first nine months of 2019, 2,531 more shops were closed by large retailers than the 3,303 closed during the whole of 2018, while a further 4,793 shops have been shuttered by large retailers through “rationalisation” as part of cost-cutting programmes.

The report says the numbers are caused by high costs, low profitability, and losing sales to online shopping.  These problems are felt 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.

The reasons for the issues facing retailers with physical shops are discussed extensively in our report Retail At Bay. The key issues are as follows

• The high costs of running retail outlets, including rents, business rates and high labour costs;
• Low profitability caused by high costs, slow growth in sales, squeezed profit margins and heavy price competition;
• The rapid growth of online competition such that by 2018 online sales accounted for around 18.4% of total retail merchandise sales, with much of online growth achieved at the expense of bricks-and-mortar retailers.
• Lack of preparation: low investment in stores and weak forward planning to meet the challenges of the new retailing.

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.

Details about where the job losses and store closures have come from:

Outcomes for 2018 (twelve months)

Retailing 2018	Administ-ration	CVAs	Rational-isation	Totals
specific redundancies & rationalisation	NA	NA	19,112	19,112
multiples’ stores closed	1,631	272	1,400	3,303
multiples jobs lost (store closure)	22,671	3,900	11,862	38,433
multiples in companies	43	8	36	83
self-employed/concessions in larger shops	1,300	2,200	1,350	4,850
Independent businesses affected	9,500			9,500
independent closures	13,680		1,460	15,140
independent job losses	68,608		6,716	75,324
Totals
job losses	92,579	6,100	39,040	137,719
stores closed	15,311	272	2,860	18,443

 Outcomes for 2019 (to October)

Retailing 2019	Administ-ration	CVAs	Rational-isation	Totals
specific redundancies & rationalisation	NA	NA	6,900	6,900
multiples’ stores closed	708	333	4,793	5,834
multiples jobs lost (store closure)	9,115	24,042	40,252	73,409
No. large/medium businesses affected	36	11	35	71
self-employed/concessions in larger shops	890	2,503	1,636	5,029
Independent businesses affected (e)	6,825		376	7,201
independent closures (e)	9,750		753	10,503
independent job losses (e)	41,800		3,010	44,810
Totals
job losses	51,805	26,545	51,798	130,148
stores closed	10,458	333	5,546	16,337