The Crisis in Retailing: Closures and Job Losses

Our figures for store closures and job losses in retailing for the years 2018-2023 can be found below.

Business Rates, Online Competitors, Coronavirus and other Misfortunes:

Permacrisis. Retailing in most of the Western World has been in crisis for more than ten years. This followed rapid debt-fuelled expansion of shops in the 2000s that pushed up rents in city centres to astronomical levels. This came to an end in the financial crisis of 2008, which led to the collapse of many retailers and store closures. The most famous business failure was Woolworths.

Growth of Online Retailing. The growth of online retailing was faster in the UK than any other country. The online share of retailing was 6.6% in 2006. In 2013 it was 12.7% and rose to 19.2% in 2019, cutting the potential sales of many previously-viable retail stores. During the pandemic online sales were boosted by the fact that many people feared going into stores, while most non-food stores were closed during Lockdowns. By the first quarter of 2021, online sales achieved a sales share of more than 36% every month, although it fell back to around 25% by early 2023 - still 30% higher than the 2019 outcome.

Retail Futures 2018 is the title of our 2014 report that argued that the growth in online retailing and changing consumer demand would lead to one in five UK stores closing in the next five years. In fact it took 5 years, 6 months for this to happen. Many retailers cut staffing, closing their branches in smaller towns and less prosperous suburbs.

The Pandemic. The Coronavirus pandemic accelerated the pre-existing trends in shopping behaviour. In most countries, including the UK, households were advised to 'work from home', non-essential shops were closed for long periods, and shopping in the remaining stores and malls was made unpleasant. Hygiene and social-distancing rules and the frequent closure or restrictions of hospitality (pubs, coffee bars, restaurants etc) made a day out shopping impossible for part of the year and an obstacle course even when shops were open. Working from home also meant, of course, that employees could no longer 'pop in' to nearby shops or buy goods on their way to or from work. Total sales in London's Oxford Street fell from the usual £10bn pa to £2bn in 2020. Each UK nation became preoccupied with offical death figures, the rate of hospitalisation and infection figures, the necessity of adherence to ever-changing covid regulations and the regular demands for more intense and longer Lockdowns. Visiting a shop for some people was tantamount to suicide. Moreover, the number of visits by foreign tourists (important for holiday destinations and retailers in major cities), especially Chinese, has plummeted and will only recover slowly.

People have got out of the habit of high-street shopping or even visiting a store. Even by early 2023, customer footfall was 10% lower than in 2019, and in major cities even less.

Inflation in 2022. Increased prices in 2022 (food rose by more than 10%) led consumers to seek out cheaper retailers and forced most retailers to become more competitive. The whopping increase in energy prices was large enough to have a profound impact on 20%-25% of consumers, so they spent less in shops and on online because they had to pay the higher energy bills.

There are two other reasons for the problems of retailing, which are out of the control of retailers.

Spending on Leisure and Tourism is Undercutting Retail Sales. Retailers were losing their share of consumer spending in favour of meals out, City breaks, gym membership, subscriptions to TV Channels, foreign holidays and spa, health and wellbeing treatments. This all leaves less to spend in shops.
The New Consumer. The financial crisis, the pandemic and 2022 inflation have all changed consumer behaviours. Challenges to living standards have led to more 'shopping around' and the resurrection of value. People never ever visited a disount store can be heard boating about 'Aldi prices' and how good Primark is. Once this behaviour has been learned, then, even if there is a sustained boost in household incomes ever the next two-three years, consumers will continue using the new cheaper stores they have found - though perhaps not as much. And if a new crisis occurs, they have already learned what to do. Customer behaviour will quickly revert to what happened more slowly in 2022.

Business Rates. Business rates are a regular property tax paid by business. They are based on hypothetical rental values. As much as one-quarter of the entire business rates total now comes from the retail sector. Rents paid by shops have been declining as stores close and new occupants become difficult to find. The decline in rents has not led to a fall in business rates. Even those whose sales have risen (especially supermarkets) have faced sharply-increased costs from complying with the new regulations to protect the public and their staff. Online retailers of course pay business rates at the reduced levels applicable to warehouses. A satisfactory future for high streets will only occur if online retailers pay the same rates as store-based retailers

The Main Impacts

This page provides data on retail job losses and store closures month-by-month this year. It provides comparative figures for 2018-2021. The year 2020 was probably the worst year for retailers for 25 years. These are analysed, based on whether retail companies have gone into administration, agreed CVAs or they have rationalised their operations to meet reduced or changing demand. The figures relate to large and medium-sized retailers (five stores or more) and to independents (fewer than five stores, mostly one or two).

Here are details from the Centre for Retail Research about where the job losses and store closures have come from in each year since we started collecting figures in this detail.

Table 1

Outcomes for 2023*

Retailing 2023 (to 13 Sept)	Administ-ration	CVAs	Rational-isation	Totals
specific redundancies & rationalisation	NA	NA	10,248	10,248
multiples': stores closed	790		918	1,708
multiples: jobs lost	17,138		16.235	33,373
self-employed/concessions in larger shops	723		1,248	1,971
independent store closures	933		1,483	2,416
independent job losses	3,825		6.970	10,795
Total Job losses	21,686		34,701	56,387
Total store closures	1,723		2,401	4,124

* based on our current information to 13 September 2023 (including Wilko losses).

Table 2

Outcomes for 2022*

Retailing 2022 (12 months)	Administ-ration	CVAs	Rational-isation	Totals
specific redundancies & rationalisation	NA	NA	13,240	13,240
multiples: stores closed	549		5,506	6,055
multiples: jobs lost	6,732		69.977	76,709
self-employed/concessions in larger shops	1,678		6,106	7,784
independent store closures	4,960		6,130	11,090
independent job losses	23,504		30,237	53,741
Total Job losses	31,914		119,560	151,474
Total store closures	5,509		11,636	17,145

* based on our current information, updated 2 Jan 2023.

Table 3

Outcomes for 2021

Retailing 2021 (full year)	Administ-ration	CVAs	Rational-isation	Totals
specific redundancies & rationalisation	NA	NA	9,118	9,118
multiples: stores closed	1,251	324	942	2,517
multiples: jobs lost`	24,179	2,851	40,843	67,873
self-employed/concessions in larger shops	3,873	107	3,982	7,962
independent store closures	3,760		5,041	8,801
independent job losses	11,882		14,019	25,901
Total Job losses	39,934	2,958	62,835	105,727
Total store closures	5,011	324	6,124	11,459

* based on our current information.

Table 4

Outcomes for 2020 (to 31 December).

Retailing 2020	Administ-ration	CVAs	Rational-isation	Totals
specific redundancies & rationalisation	NA	NA	14,755	14,755
multiples: stores closed	2041	533	2,975	5,549
multiples: jobs lost	53,364	11,496	44,521	109,381
self-employed/concessions in larger shops	8,715	490	8,240	17,445
independent store closures	4,189	-	6,307	10,496
independent job losses	12,286	-	28,697	40,983
Total Job losses	74,365	11,986	96,213	182,564
Total store closures	6,230	533	9,282	16,045

* Correct to 31 December 2020.

Table 5

Outcomes for 2019 (12 months)

Retailing 2019	Administ-ration	CVAs	Rational-isation	Totals
specific redundancies & rationalisation	NA	NA	9,593	9,593
multiples: stores closed	684	313	4,404	5,901
multiples: jobs lost	9,060	24,042	43,164	72,266
self-employed/concessions in larger shops	5,873	2,420	5,991	14,284
independent store closures	5,720	-	4,452	10,172
independent job losses	23,171	-	19,816	42,985
Total Job losses	38,103	26,462	78,563	143,128
Total store closures	6,404	313	9,356	16,073

Table 6

Outcomes for 2018 (12 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
self-employed/concessions in larger shops	1,300	2,200	1,350	4,850
independent closures	9,820		1,460	11,280
independent job losses	48,314		6,716	55,030
Total job losses	72,285	6,100	39,040	117,425
Total store closures	11,451	272	2,860	14,583

For more information or support about CVAs, talk to KSA Group (https://www.ksagroup.co.uk/)

Definitions

Administration –administration is a form of insolvency giving a firm protection from its creditors and time to reform the business. It is similar to Chapter 11 of the U.S. Bankruptcy Code. On this webpage we only include actual job losses and actual store closures over the year following administration, although in our Who’s Gone Bust? we include the total jobs and stores at risk.
CVAs – Company Voluntary Arrangements – a different form of insolvency intended normally to give a business time to prepare a recovery business plan, which needs the agreement of its creditors. The plans often involve store closures and job losses as part of relaunching the business.
Rationalisation – our term for store closures or job losses occurring either as a regular aspect of business or a special cost-cutting programme. Retailers may close stores or warehouses, reorganise their management structure in stores or the head office or propose cuts in every department in order to reduce losses and cut costs, but where there is no recourse to administration or CVAs.
Store – a special retail unit with a visible physical existence, whose size may vary from less than 1,000 square feet to more than 120,000 square feet. In English English ‘shop’ and ‘store’ mean the same although this is not true in North America and other continents.
Job losses – these include announced reductions in a company’s labour force, both full-time and part-time. There is no assumption that such workers become permanently unemployed.
Multiples – large retail businesses with ten or more stores.
Medium-sized retailers – multiples with between five and 10 stores.
Independents – mainly one-shop retailers but includes businesses with fewer than five stores.
Online retailers – retail businesses that primarily trade online, although they may also operate a small number of stores.
Pop-up stores – not included in this analysis.

The estimates on this page give job losses and store closures resulting from:

We only include proposed closures and announced job losses. We do not include what the BBC calls jobs ‘at risk’ (ie companies or in administration) because there is a danger that this overstates losses in a normal year and we publish those figures anyway in Who’s Gone Bust?

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