RETAIL ENVIRONMENT
Not so happy New Year as retail faces 200,000 new job losses
The retail sector is bracing itself for around 200,000 further job losses as a result of the ongoing pandemic restrictions, according the influential Centre for Retail Research (CRR).
In a report on its website, the CRR says “The first half of 2021 looks much like 2020, only worse. We expect there to be 200,000 job losses in the sector and a lot more bad news about corporate failures.
“The effect of the coronavirus lockdowns and the various tier restrictions in England and other parts of the UK have come on top of retail's existing problems. It has been a hammer blow against the sector, which has particularly disadvantaged most non-food stores.
“Shopping in high streets and malls has become less pleasant. Hygiene and social-distancing rules and the frequent closure or restriction upon hospitality have made a day out shopping impossible for part of the year and an obstacle course even when shops are open.
The CRR argues that physical retailing is already in crisis caused by high costs, low profitability, and losing sales to online shopping.
The low growth in consumer spending since 2015 has meant that the growth in online sales comes at the expense of the high street.
“Attitudes vary about whether this crisis represents simply a change in how we shop or a dangerous trend that will vitiate our town centres, high streets and deplete our social space – it will probably be a bit of both.
“The reasons for the issues facing retailers with physical shops are discussed extensively in our report Retail At Bay, but the key issues include the high costs of running retail outlets, including rents, business rates and high labour costs.”
In addition, low profitability, slow growth in sales, squeezed margins and heavy price competition have been compounded by rapid growth of online competition as well as low investment in stores and weak forward planning to meet the challenges of the new retailing.
