Nearly 15,000 British retail jobs have already been cut since January in a “brutal start to the year” for the high street.
Joanna Partridge www.theguardian.com
A total of 14,874 retail job losses have been announced by companies so far, according to analysis from the Centre for Retail Research (CRR).
National retailers including stationery brand Paperchase, clothing chain M&Co and Tile Giant have all gone bust in recent weeks, while discount retailer Wilko, clothing retailer New Look and supermarkets Tesco and Asda have all also announced job cuts.
Large retail chains, which have 10 or more stores, are among those cutting jobs on UK high streets, as well as at main shopping destinations, the research found.
Most of the job losses – totalling 11,689 – are at large retailers including Tesco and Asda who are carrying out cost cutting programmes and restructuring operations.
Meanwhile, a further 3,185 jobs have been lost at large retailers which have collapsed and undergoing insolvency proceedings.
The embattled stationery specialist retailer Paperchase fell into administration in January, after being hit by rising costs and disappointing sales.
The brand and its intellectual property was bought by Tesco, but the deal did not include taking on Paperchase’s 106 stores across the UK and Ireland, prompting the immediate loss of 250 jobs, with an uncertain future for the remaining 500 staff.
Many of the struggling retailers have already collapsed in recent years, according to Prof Joshua Bamfield, the CRR’s director.
“The process of rationalisation will continue at pace as retailers continue to reduce their cost base,” he said. “We are unlikely to see any respite in job losses in 2023 after a brutal start to the year.”
Retail job losses have been mounting for several years, even prior to lengthy closures after repeated Covid lockdowns.
Just under 3 million people were employed in retail in the second quarter of 2022, according to a survey from industry body the British Retail Consortium, which was 63,000 lower than a year earlier.
A revaluation of business rates, which are among the largest operating costs for retailers, is taking place from 1 April, and looks likely to reduce the rateable values used to determine bills.
Business rates relief means that new bills will be discounted by 75% for the tax year from April 2023 to the end of March 2024, up to a cash cap of £110,000 per business, as announced by the chancellor, Jeremy Hunt, in his autumn statement.
The Treasury has said that the retail sector “is set to see its overall bills paid fall by 20%” as a result.
However, the property adviser Altus Group is warning that most retailers with multiple stores will only benefit from the discount on a handful of their branches because of the cap.
“While the adjustments brought about by the revaluation are welcome, 10% overall just does not go far enough given the state of the market on the valuation date which is likely to lead to a tsunami of appeals,” said Alex Probyn, global president of property tax at Altus Group.