Is it Closing Time for Retail Stores?

In recent years many businesses such as Toys ”R” us, Maplin and BHS have already become defunct, whilst others including HMV, Homebase, Patisserie Valerie, New Look, House of Fraser, Debenhams, and Mothercare are struggling to keep stores open, with 235 department stores standing empty across the UK. In fact, since 2013, the amount of shops in Welsh and English town centres has decreased by 8%, with 85,000 retail jobs lost in the first eight months of 2018, according to statistics from the Guardian.

But why are our high streets in decline?

Heightening costs to operate and online competition are both factors. Retailers face an increased cost to operate, in part due to the fallen value of the pound, which still hasn’t fully recovered from the Brexit vote. Further implications that will be incurred by Brexit are that some retailers may have to reassess their supply chains due to tariffs and increased prices upon EU imports. Labour costs may also increase as a result of Brexit if it becomes harder to find workers from foreign countries in the EU, who traditionally have filled retail jobs in the scenario that Brexit introduces limitations on the freedom of movement.

Additionally, physical stores face a new competitor in the form of online shopping giants like Amazon and Asos, alongside websites belonging to supermarkets, which generate a fifth of all retail spending. This appears to be comparable to how the rise of supermarkets killed off smaller stores in the 20th century. Younger shoppers may prefer the ease of ordering an item from their homes, choosing not to visit a shopping-centre because of the convenience.

However, high-street shops could adapt in order to endure these challenges by installing more stimulating interactive experiences instead of the dull, endless rows of shelves that most are currently comprised of. These would encourage would-be online shoppers to visit stores in person to buy an item, instead of uneventfully purchasing the same product over the internet. The technology company Apple has stores, such as the outlet on Regent Street, that are prime examples of how a retail experience can be enjoyable, with Apple offering drawing classes using their products. To some extent, IKEA’s inclusion of a food court attracts customers, exhibiting how experiences can be implemented.

Although they may be in decline, perhaps there still is hope for our high streets.

Attached to this article are several photos of closed or soon-to-be-closing shops, displaying the extent of the retail downturn.