Urgent reform needed to high street to prevent further losses in clothing sales
A DRAMATIC shift in consumer spending over the pandemic has left high street clothing stores across Europe with a black hole running into tens of billions of pounds, according to research by Retail Economics commissioned by legal firm Eversheds Sutherland.
Its 'Future of the European Apparel Industry' report found that the pandemic has accelerated by three years UK retail's shift to an online sales ‘tipping point' – where online sales overtake in-store sales.
UK retailers will be the first across some of Europe's biggest retail markets (ahead of Germany, France and Netherlands) to make the majority of clothes sales electronically, with 52 per cent of all transactions set to occur online next year, and not 2025 as originally envisaged.
The pressure is on apparel retailers to pivot their business models and adapt to this new reality. If retailers are to be successful in capturing consumer attentions and driving growth online, the purpose of stores will need to evolve.
As lockdowns came into force across Europe, store visits plummeted, and the research found that more than a third of consumers in the UK (35 per cent) will not return to stores with the same frequency as they did before Covid-19.
In the UK, the report estimates that the shift to online will result in apparel store-based sales losing an average of £3 billion a year compared to pre-pandemic projections.
Gareth Planck, consumer and real estate partner at Eversheds Sutherland in Belfast, says: “The Stormont Executive last week launched a call for evidence on how to improve, adapt and future-proof our high streets as part of the work being taken forward by its High Street Task Force.
“While retail is only one part of what makes a thriving urban centre or high street, it is a large and significant part. Changes to consumer habits and online shopping in particular present serious challenges to traditional ‘bricks and mortar' stores.
“Over the pandemic we saw the switch to consumers buying online accelerate, and even though they can now return to the high street, we can see that buying online has become a habit.
“The industry needs a transformation in planning, policy and skills to avoid billions of pounds of sales and hundreds of jobs being lost in Northern Ireland.”