New analysis by the BBC has suggested that retail job losses in the UK could total 22,000.
The corporation found that 7,000 have lost their jobs so far this year through shop closures and administrations, with a further 9,500 due to go. Some 5,100 more jobs are in question at budget retailer Poundworld which is currently in administration.
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Retailers are being disrupted by online giants like Amazon which are able to undercut them on price and appeal to a new generation of shoppers who prefer to make their purchases online.
While conventional retailers need to cover the high costs of running physical shops on high streets – including rent, business rates and staff – the likes of Amazon have much lower overheads running huge centralised warehouses which benefit from economies of scale. US giants like Amazon are also masters of utilising international tax rules to minimise their liabilities.
Toys R Us has been the biggest UK retail collapse this year, costing 3,200 jobs. Thousands more retail job losses have resulted from the closure of chains including House of Fraser and Maplin, whilst many more retail giants are cutting back their number of stores.
The BBC analysis comes at the same time as Press Association reports that Britain’s largest businesses have cut 50,000 jobs over the last six months.
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By GlobalDataIn addition to the woes of the High Street retail sector, more than 2,000 workers lost their jobs after the collapse of construction giant Carillion earlier this year. Telecoms giant BT is cutting nearly 10,000 UK jobs as part of a cost-cutting drive.
Robert Hayton, from management consultants Altus Group, blamed business rates and other costs on the high number of retail cutbacks.
He told The Times: “Business rates are rarely the sole driver for insolvencies but certainly a contributory factor, with bills having risen more than a fifth through inflation during the seven years before last year’s revaluation. Add that to the lethal cocktail of other increased operating costs for the national living wage and apprenticeship levy and it creates the perfect storm.”
A report by accountants PWC and the Local Data Company found that 4,000 High Street shops opened in the UK last year versus 5,800 closures – a net loss of 1,800.
Despite the challenges faced in retail, figures for the first quarter of this year released by the Office of National Statistics found there was record UK employment in the first quarter of 2018 at 32.34m (up 396,000 year on year).
The ONS said there were 1.42m unemployed in the first quarter of the year, down 116,000 year on year. The unemployment rate was said to stand at 4.2 per cent (the joint lowest leve since 1975).
