The so-called retail apocalypse appears to have rocked British retail in 2019.
According to the Centre for Retail Research, more than 140,000 U.K. retail jobs, or 2,750 jobs a week, were slashed over the course of 2019.
This is the highest rate of job cuts in 25 years on high-traffic British shopping areas, known as “high streets,” and marks an increase of more than 20% year-over-year, compared to the 117,400 jobs that were shed in 2018, the report said.
The CRR also noted an increase in store closures. This year, 16,073 U.K. shops (about 61 per day) were shuttered, up from 14,583 total closures the previous year. About 38,100 jobs were lost due to stores going bust, including Karen Millen and Coast, but the majority of job cuts (roughly 78,600) occurred as retailers made adjustments to cut costs.
As 2020 begins, the CRR predicts further job cuts and store closings, barring government intervention. High business taxation rates are one cause for the U.K. retail sector’s struggles, explains the CRR, along with high fixed costs, slow sales growth, heavy price competition and the rise of e-commerce.
Over the past decade, e-commerce has undergone a sizable expansion. According to the U.K.’s Office for National Statistics, online sales now account for 21.5% of retail sales in the state. In January 2010, e-commerce made up just 7% of the U.K.’s total retail sales.
As digital disruption has transformed shopping this decade, store closures and layoffs have followed for traditional retailers internationally. Retailers that failed to adjust to the new climate this decade often faced bankruptcy or complete shutdown. The 2010s saw the end of several high-profile American shoe stores, including Payless, Sports Authority and Bakers Footwear Group.
Brick-and-mortar closures aren’t always the hallmark of a retail apocalypse, experts say, explaining that shuttering outposts can be a sign of efficiency. Retail analysts say that shrinking store counts can lead to improved profitability at remaining locations as well as lower overall costs, as retailers adjust to the new climate.
Whether due to efficiency or not, the number of U.S. store closures jumped in 2019, according to Coresight Research. The research and advisory firm estimates reports that more than 9,200 doors closed this year as of late November, compared with just 5,800 in 2018. American retail employment, meanwhile, is expected to fall by 2% between 2018 and 2028, according to the U.S. Bureau of Labor Statistics, due to the rise of online sales.
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