UK Retail Workers Face Threats From Store Closures As Online Sales Rise

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Stormy High Street
Stormy High Street

This Autumn retail workers face an unprecedented threat to their jobs nationwide. What used to be a respectable lifelong career option with fair wages and good benefits has now become a more temporary earning option with an uncertain future and the fear of further budget cutbacks and redundancy. Employees are expected to do more and more with less money, overtime, holidays and discounts.

It was announced in April that Sainsburys and Asda are to merge. The Independant reported that Sainsbury’s boss Mike Coupe has claimed he “won’t cut shop-floor jobs or close any stores as a result of the proposed £12bn mega-merger with Asda.” (1)

However there are many jobs that happen behind the scene and it is doubtful if there are any retail businesses that would want to take over the massive commercial space and hire a complete superstore retail selling team immediately.

Kelly a store customer assistant at the Bognor Regis branch of Sainsburys in West Sussex said “I don’t know what will happen with loyalty card facilities like an app for our Nectar store card as the merger puts everything on hold and I don’t know if I will even have a job here soon.”

The department store giants have been adversely affected by high rates and costs and the advance of the new multi-channel retailing landscape and BHS went under in 2016 with 11000 jobs axed and the closure of 164 stores which led to a pension deficit of £571 million. (2) England’s biggest shops have struggled to create an enjoyable leisure experience to tempt customers in whilst keeping ahead with the latest fashions in very competitive trading times.

House of Fraser are closing 31 stores it was announced in June. The BBC confirmed that 31 of its 59 stores will close in January, with a total of 6000 jobs expected to be cut that includes House of Fraser staff and people who work for branded concessions. (3) Marks and Spencer have already closed more than twenty stores in their “radical four year 100+” shop closure plan. (4)

Recently pre-Brexit caution by consumers has been coupled with the high cost of imports, relative to the weak pound and compounded by a rise in interest rates. This toxic recipe has upset balance books of many well known businesses that have been a feature on British high streets for generations.

The closure of all of Poundland’s stores in July cost 2500 employees their jobs and 300 staff in the budget retailer’s distribution and warehouse network. (5) Spring 2018 also saw electronics retailer Maplin closing its doors permanently, affecting 2300 staff both in stores and in Head Office. (6) Sadly Toys R Us collapsed financially and closed 100 stores this summer leaving 3000 people looking for new positions elsewhere. (7)

Fashion chain New Look announced in March that 60 stores will cease to trade putting 1000 jobs at risk in a climate of tough trading conditions. (8)

Laura Ashley have closed 25 stores including both shops in Chichester and stores in Camberley and Portsmouth. This is in addition to the closure of “22 Homebase stores where Laura Ashley concessions had become a decorating destination for many customers” (9).

The silver lining is that this established fashion and home brand illustrates the changing trends in the way people are shopping. Ashley’s internet sales a growing steadily every year.

In 2018 analysts calculated that 18 percent of retail sales were made online in the UK and each year that figure is rising. (1)

People working in retail as much as possible must consider which company to invest their career and time to insure that their chosen company can weather these stormy conditions. Amazon is leading the way in a new environment with super fast delivery straight to the front door. Future generations are expecting both an entertaining and technically seamless customer experience, from the comfort of their reclining chairs.

 

References:

(1) “Sainsbury’s-Asda merger: What this means for store closures and job losses” The Independant, Ben Chapman, 30 April 2018

https://www.independent.co.uk/news/business/analysis-and-features/sainsburys-asda-merger-latest-updates-store-closures-job-loss-locations-a8329451.html

(2) ‘Who’s Gone Bust in Retailing 2010-18?’ Centre for Retail Research, August 2018

http://www.retailresearch.org/whosegonebust.php

(2) “E-commerce share of retail sales revenue in the United Kingdom (UK) from 2015 to 2018” Statista 2018

https://www.statista.com/statistics/285978/e-commerce-share-of-retail-sales-in-the-united-kingdom-uk/

(3) ‘House of Fraser store closures to go ahead’ BBC News 5 August 2018

https://www.bbc.co.uk/news/business-45078498

(4) ‘M&S store closures: full list of shops to shut announced so far’ The Guardian, Sarah Butler, 22 May 2018

https://www.theguardian.com/business/2018/may/22/ms-store-closures-list-marks-spencer

(5) ‘Poundworld set to disappear from the high street as final shop closures announced’ The Independant, Helen Cahill, 20 July 2018

https://www.independent.co.uk/news/business/poundworld-shop-closures-disappear-high-street-administrators-a8455651.html

(6) ‘Maplin faces store closures as demise leaves creditors owed £150 million’ Consultancy.uk, 2 May 2018

https://www.consultancy.uk/news/16968/maplin-faces-store-closures-as-demise-leaves-creditors-owed-150-million

(7)’All Toys R Us stores to close their doors’ BBC News 14 March 2018

https://www.bbc.co.uk/news/business-43401674

(8) ‘Full list of 60 New Look stores set to close nationwide’ Evening Standard, Melisha Kaur 8 March 2018

https://www.standard.co.uk/shopping/full-list-of-60-new-look-stores-set-to-close-nationwide-a3784721.html

(9) ‘Why the market has fallen out of love with Laura Ashley’ Shares Magazine News 15 February 2018

https://www.sharesmagazine.co.uk/news/shares/why-the-market-has-fallen-out-of-love-with-laura-ashley