What is driving the collapse of high street shops?

Mothercare is the latest name to disappear from the British high street as administrators plan to close all of the chain’s 79 UK stores.

The baby goods company announced on Monday that it was “not capable” of being profitable in the UK, even though international franchises are in the black, says the BBC.

Today, administrators PwC announced the store closures, which will be implemented in phases across Britain.

“This is a sad moment for a well-known high street name,” said joint administrator Zelf Hussain, adding that Mothercare “has been hit hard by increasing cost pressures and changes in consumer spending”.

Mothercare is one of many retail brands to have struggled in recent years, and the decline doesn’t appear to be slowing.

What is the extent of the problem?

Nearly 12% of shopping locations – including high street stores, shopping centres and retail parks – were empty in the first half of 2019.

The high street has been left with the highest number of empty outlets in five years after 25,700 shops closed their doors in the past year, according to Local Data Company’s review of 3,000 retail centres.

Toys R Us, Poundworld, Maplin and Mothercare are some of the bigger companies to go bust, while retailers New Look and Carpetright are undergoing restructures, reports The Guardian.

In 2018, nearly 85,000 retail jobs were lost in the UK as more retailers went bust, says the Daily Mirror.

What’s causing the problem?

The most commonly cited cause of the high street’s demise is the rise of internet shopping, which is seen as having had a dramatic impact on the way people shop.

But just 18.1% of retail purchases in the UK are made online, according to recent figures from the Office for National Statistics (ONS), indicating that it isn’t the internet alone that is responsible for the high-street hit.

Researchers at A&M and Retail Economics say that over the past five years, companies have had to spend 10.8% more cash on costs including wages, rents and business rates.

There has also been a shift away from spending money on products, and towards consumers spending more of their disposable income on experiences and lifestyle, says the BBC.

High rents are contributing to the retail problem, with struggling retailers blaming landlords and landlords blaming councils, says The Guardian.

What’s the future of the high street?

Retailers and unions have called for urgent government action to help the high street, but there seems to be little taking place to stop the decline.

Councils, who have been hit with ten years of austerity and cuts, don’t have the budgets they need to spruce up their high streets and try to combat decreasing footfall.

There is some good news for some retailers, however. Independent shops are doing better than their chain rivals when it comes to high street longevity.

Only a net total of 138 independent stores closed their doors in the first six months of 2019, with high numbers of barbers and beauty salons opening to boost the overall picture.


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