Employment reductions are expected with another 200,000 cuts in the new year.
In 2020, according to a report, the High Street lost 177,000 jobs. This year, with another 200,000 job cuts anticipated, an even more devastating toll on retail employment is projected.
The job losses in the largest private employment sector in the UK – with special significance for women – demonstrate the drastic and enduring effect on the retail environment that the pandemic would have.
In 2020, 3,400 jobs will be lost every week, according to new estimates released on Friday by the Centre for Retail Research (CRR). The CRR defines 2020 as one of the most difficult times in the last 25 years for the UK high street, with Debenhams and Sir Philip Green’s Arcadia Company among the influential 2020 casualties.
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Department stores were once hailed as temples of consumption. Large stores are costly to operate.
But mid-sized chains such as Debenhams and House of Fraser are struggling to compete in city centers with large department stores, where customer numbers are declining but expenses are rising, such as rent and salaries.
By the end of 2018, Britons had bought their phones and tablets for almost £ 70 billion. The internet is killing the high street. Consultants from Retail Economics expect that this shopping frenzy will continue, with online sales hitting almost £ 100 billion by 2021.
When less and less Brits bother to visit the high street, department stores are in the firing line, with sales of clothes and household appliances moving quickest online.
After the EU referendum, the British have faced a sharp increase in the cost of living. Money is tight.
Inflation increased to 3 percent last year, while salaries stayed between 2 percent and 2.5 percent .
Most pay settlements last year were closer to 2 percent, according to compensation analysts. This triggered a major decrease in inflation-adjusted earnings and lowered most shoppers’ disposable income.
The number of clothing and footwear sold in the U.K. Brits want experiences, not objects According to retail consultant GlobalData, it dropped 0.8 percent last year and is predicted to decline further this year. The slump is due to retailers passing on higher sourcing costs as a result of the British pound’s weakness, but also to Britons giving priority to services such as holidays and dining out.
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Some 15,700 shops have permanently closed their doors, with CRR director Joshua Bamfield estimating that up to 200,000 more jobs will vanish by 2021, as the major change to online shopping during the shutdown means even harder choices about the future of shops.
“Our forecast is based on a number of factors, such as the cumulative effects of the months-long closure and its impact on cash flow and rent arrears due after the moratorium ends,” Bamfield said, “while the longer-term impact of customers’ greater use of all types of online commerce is likely to be hugely damaging to physical stores.”
Half of the staff at stores that went bankrupt lost their jobs in 2020. That’s a greater proportion than during the recession of 2008, when it was around one-third, the CRR said. As small stores closed and big chains reduced their physical presence, the majority of job losses were the result of store closures.
Bailouts of businesses such as Oasis, Warehouse and Cath Kidston all saw store closures in a sign of the times.
The current hollowing out of the high street removes entry-level retail employment that have historically been filled by women – positions such as sales clerks and cashiers – while jobs in e-commerce-related development areas, such as delivery drivers, are more likely to go to men.
A charity that supports children whose parents work in retail but are struggling to make ends meet, the Fashion and Textile Children’s Trust (FTCT), said it was bracing for a flood of requests for assistance.
The number of applicants for its grants rose by almost 50 percent to 3,400 in 2020.
FTCT director Anna Pangbourne said the charity distributed a record amount of financial assistance during the health crisis, supporting more than 1,000 children with grants reaching over 1,000.