UK high streets have shed more than 140,000 jobs this year as store closures and retail failures made 2019 one of the most challenging years in a generation.
More than 2,750 jobs were lost every week, according to a detailed analysis by the Centre for Retail Research (CRR) published today. It predicts the picture will worsen in 2020, unless the government intervenes, with high business rates one of the factors blamed for accelerating chain store closures.
Prof Joshua Bamfield, the CRR’s director, said retail was in crisis owing to high costs, low levels of profitability and sales moving online.
“These problems are felt by most businesses operating from physical stores in high streets or shopping malls,” Bamfield said. “The low growth in consumer spending since 2015 has meant that the growth in online sales has come at the expense of the high street.”
The CRR said 38,100 of the jobs lost this year were down to retail chains going bust with Karen Millen and Coast among 2019’s high profile casualties. Another 26,500 roles were shed through company voluntary arrangements (CVAs), a controversial insolvency procedure that has been used by the likes of Sir Philip Green’s Arcadia group and Debenhams to shed loss-making stores.
Another 78,600 jobs were axed through cost-cutting programmes by large retailers or small shops simply shutting for good. Marks & Spencer is among the big names closing stores while House of Fraser, which is part of Mike Ashley’s Frasers Group, has also been shutting outlets. A total of 143,100 jobs were lost in 2019, according to CRR’s calculations, up by more than a fifth on 2018’s 117,400.
The CRR also calculated that 16,073 shops closed around the UK in 2019, or around 61 every working day. That was an increase on the 14,583 shops which closed in 2018.
A separate study looking at how the UK labour market had changed over the past decade said the rise of online shopping had eliminated 289,000 “traditional” high street roles. Eight out of 10 of these entry-level retail jobs – positions like sales assistant and checkout operator – were held by women, according to the RSA Future Work Centre.
The thinktank is part of the Royal Society for the encouragement of Arts, Manufactures and Commerce, the charity run by Matthew Taylor who authored a gig economy review for Theresa May when she was prime minister.
Alan Lockey, who heads the thinktank, said: “The carnage on the high street has hollowed out many jobs traditionally held by women, but areas of growth related to e-commerce, such as van driving, are going more to men. This is having a profound effect on individuals, families and society.”
Today one in every five pounds spent at the shops is online – more than double the level at the start of the decade. The resulting shift in labour markets are stark. There are now 166,000 fewer check-out staff, shelf fillers and sales assistants than at the start of the 2010s, according to RSA’s analysis of official employment data, while the pool of bank and post office clerks has shrunk by 65,000 as branches closed. By comparison there are 102,000 more van drivers and 161,000 more administration roles.
Lockey said the decline of the high street was the most dramatic factor affecting the UK’s jobs landscape, even though austerity, which had eliminated 109,000 public sector administrators, also loomed large.
Despite the reckoning taking place the retail sector remains the UK’s biggest private sector employer with a workforce of around 3 million. Its decline contrasts with a wider picture showing record levels of employment as former shop workers find alternative work in restaurants, hotels and as care workers. The RSA study showed a near 78,000 rise in the number of care workers.
“The employment figures show that over the last decade the economy has been good at creating jobs but low skilled workers in the retail sector have been pushed from pillar to post. The alternative jobs they are getting are often low paid and do not provide good security, leading to working poverty,” Lockey added.
The important Christmas trading period appears to have brought little respite for struggling retail chains. Trading during November and December was marred by heavy discounting as stores sought to tempt out shoppers put off by the uncertainty around Brexit and the 12 December general election. The post-Christmas sales got off to a disappointing start too, attracting smaller crowds than in previous years.