January 2nd 2025.
In the year 2024, a significant number of well-known brands made the difficult decision to permanently close their doors. According to new data from the Centre for Retail Research, a staggering 13,000 high street shops shut down for good, averaging out to 37 closures every single day. This was a 28% increase from the previous year, indicating a concerning trend in the UK retail industry.
Out of the total closures, around 11,300 were independent stores that faced financial struggles due to the reduction in Covid-era grants and schemes. The remaining 2,138 were from larger chains, such as Ted Baker, Homebase, and Carpetright, which had to shut down due to insolvency proceedings or as a cost-cutting measure. Unfortunately, this resulted in a loss of jobs for approximately 170,000 retail workers.
One notable brand that faced bankruptcy was Carpetright, a popular carpet and flooring store. Professor Joshua Bamfield, director of the Centre for Retail Research, expressed his concerns about the current state of the retail industry, stating that while the closures in 2024 were not as severe as in previous years, they were still worrying. He also predicted that things would only get worse in the upcoming year, with an estimated 17,350 store closures expected in 2025.
The Centre for Retail Research attributes this predicted increase in closures to various factors, including a rise in national insurance contributions and the national minimum wage. These changes, announced in the October Budget and set to take effect in April, will likely cause businesses to struggle with rising costs. Additionally, the Budget also announced changes to big business rate taxes, with the discount decreasing from 75% to 40%. This could result in a significant increase in the average shop's rates bill, from £3,589 to £8,613 for the 2025/26 financial year, according to commercial real estate firm Altus Group.
Alex Probyn, Altus's president of property tax, expressed concern over the decision to scale back the rate relief, calling it "foolhardy." He also pointed out that despite the recognition of the burden business rates place on high streets, the burden will only increase with these changes. It is clear that the retail industry is facing significant challenges, and it remains to be seen how businesses will adapt and navigate these changes in the coming years.
[This article has been trending online recently and has been generated with AI. Your feed is customized.]
[Generative AI is experimental.]
