Report warns more than one in four shops could close in next decade

Tens of thousands of shops could close and the retail industry could lose almost a million jobs by 2025, according to a new report.

The report, by the British Retail Consortium, warned that a number of factors including rising salary costs due to the introduction of the National Living Wage, the new apprenticeship levy, and increasing digital efficiencies, could lead to the closure of up to 74,000 shops and the loss of around 900,000 jobs within the retail sector.

The continuing evolution of the retail sector could have a higher impact on smaller businesses, who often have less room to manoeuvre when it comes to absorbing or adapting to higher costs. There could also be a regional imbalance, with nearly a third (30%) of potential shop closures occurring in Wales and the North of England.

The BRC said that the introduction of the National Living Wage and the apprenticeship levy both had ‘sound intentions’ but could fail on implementation. They could in effect, end up being contributory factors that could lead to a business facing company insolvency if they are unable to absorb the higher operational costs into their strategy. 

Many high streets in towns and cities throughout the country have still not fully recovered from the financial crash of 2008. Shop closures rose steeply then and several well-known chains such as Woolworths and MFI disappeared. The retail sector currently employs around three million people however and there are around 270,000 shops trading in the UK.

The report said that areas that are already economically fragile would be likely to see the greatest impact of store closures. Some of the workers affected by changing roles were also likely to be those who may find it hardest to transition into new jobs that are created.

The BRC report contained a number of recommendations that could help mitigate the effects of these changes on retail businesses. These included reforming the business rates system, strengthening and clarifying the Low Pay Commission in regards to the National Living Wage and giving employers more discretion over how and where money raised by the apprenticeship levy is spent. 

By Phil Smith

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