Is retail in crisis? Or just in reconstruction?

RETAIL WASTELAND: A bleak-looking Belfast city centre. Photo: Hugh Russell
Gary McDonald Business Editor

NEARLY 4,000 shop jobs were lost in Northern Ireland in 2019, the worst suffered by retailers in the past 25 years, as the industry battled high costs and changing shopping habits, new figures show.

In the UK as a whole, a record 16,073 shops - about 60 every working day - pulled down the shutters for the final time this year, with 143,100 jobs going across high streets, shopping destinations and malls.

But despite the Centre for Retail Research's end-of-year report referring to "retail in crisis" and predicting more gloom next year, a local business head is refusing to write off the sector in Northern Ireland just yet.

Retail NI chief executive Glyn Roberts concedes these are "acutely challenging times" for the sector in the north.

But he insists: "2020 will be the year of reinvention for our sector, our high streets and our town centres as we see the creation of more confident and dynamic independent retailers, who will be at the cutting edge of a new retail sector.

"Our high street is not dying, but instead is going through a reconstruction process which will result in a hugely different retail sector."

He added: "Consumer behaviour is rapidly changing and people want something different from their high streets.

"And the smaller, more agile and tech-savvy retailers who can adapt to this tidal wave of change will be the ones who will claim the future."

In the last decade, a raft of once-popular household names have disappeared completely from the UK's high streets.

They include the likes of British Home Stores (it shut its last store in June 2016), Toys R Us (April 2018), Poundworld (August 2018), Barratts Shoes (November 2013), Phones4U (September 2014) and Tie Rack (November 2013).

Major chains to disappear this year include Debenhams, Bon Marche, Mothercare, Clintons, Karen Millen and Jack Wills.

Indeed during 2019, large retailers with 10 or more stores closed 5,901 shops, a leap of 79 per cent on the 3,303 stores that they closed in 2018, according to the Centre for Retail Research.

Independent retailers, while still closing 10,172 stores, fared slightly better, with closures down nearly 10 per cent compared with the 11,280 shops they closed in 2018.

Overall, the total number of shops pulling down their shutters for the final time rose by 1,490 during 2019, up from the 14,583 shops closed in 2018.

Professor Joshua Bamfield, director at the Centre for Retail Research, anticipates another tough year ahead for high streets, forecasting that store closures will rise by about 9 per cent to 17,565 during 2020.

He said: "The commercial pressures of higher labour costs, business rates and relatively weak demand will continue to undercut profits and force the weakest companies to close stores or enter administration.

"The high street and suburbs will continue to decline."

He added: "In 2020 further announcements from companies that have already gone through CVAs or administration may well result in cutbacks on their existing operations."

Mr Roberts added: "For Retail NI members, it's not in any way about managing decline, but about managing the future. That future will no doubt be the blurring of the line between retail and hospitality, with our two sectors moving ever closer to create a very different experience for the consumer.

"We need a big, bold and radical plan for creating 21st century town and city centres which are family-friendly with more independent retailers, a vibrant living community and, above all else, fun places to visit.

“A key challenge for a restored Assembly is the fundamental reform of our broken and antiquated system of business rates.

“That is Retail NI's top priority given that our members pay the highest rates in the UK.

“We want to see the targeted approach to small business rate relief, which was put forward by the last finance minister in his Rethinking Rates proposals, which include targeted rates relief for the mainstays of the high street-independent retail and hospitality businesses.”

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