December 29th 2024.
The retail industry in the UK has been hit hard this year, with a staggering 40% increase in job losses compared to last year. Over 170,000 employees in the retail sector have found themselves without a job, as several major high street companies collapsed. Among the 38 retailers that went into administration in 2024 were well-known names such as Homebase, Ted Baker, The Bodyshop, Carpetright, and Lloyds Pharmacy, according to data compiled by the Centre for Retail Research.
In total, 169,395 retail jobs were cut since the beginning of the year, which is almost 50,000 more than the previous year. This is the highest number of job losses since 2020 when the Covid-19 pandemic forced businesses to close their doors during lockdowns, resulting in over 200,000 job losses. The Centre for Retail Research found that about a third of the job cuts were due to companies going into administration, while the remaining job losses were a result of cost-cutting measures by larger retailers or small independent stores shutting down permanently.
Professor Joshua Bamfield, director of the Centre for Retail Research, noted that the relatively low figures in 2023 were just a temporary pause for retailers after the lockdowns. However, with the ongoing challenges of changing customer shopping habits, inflation, rising energy costs, and high business rates, many retailers were forced to make even deeper cuts in 2024. The situation is expected to worsen in 2025, with changes to budget tax and wages looming ahead.
Both big chains and small businesses have been affected by the retail crisis. Small businesses with only one to five stores saw a total of 58,616 job losses in the past year. Experts predict that 2025 will be a particularly difficult year for the retail sector, as the government plans to increase national insurance contributions and reduce the discounts for business rates. Alex Probyn, president of property tax at Altus Group, pointed out that the upcoming changes to business rates will disproportionately impact independent retailers, with an average increase of 140% in their bills, adding an extra £5,024 for the average shop.
The current 75% discount on business rates, which is set to expire on March 31, 2025, will be replaced by a less generous 40% discount, with a maximum of £110,000. While this change will save the government money, it is estimated to cost the retail sector an additional £688 million. Professor Bamfield warned that these changes could lead to a grim outlook for 2025, with a projected loss of up to 202,000 jobs in the retail sector. Despite the recent busy scenes on Oxford Street on Boxing Day, many businesses are still struggling to stay afloat.
However, there is a glimmer of hope for Homebase fans as CDS Superstores, the owners of The Range and now Wilko, have announced plans to reopen 70 Homebase stores as The Range Superstores. These new superstores will feature Homebase garden centres and a dedicated section for "Kitchens by Homebase." It remains uncertain if this move will provide job opportunities for former Homebase employees.
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