Across the embattled retail sector more than 10,000 shops pulled their shutters for the final time in 2023 with almost 120,000 staff losing their jobs in what was another poor year for the sector with large retailers set to face the biggest tax increase in 33 years in April.
End of year figures compiled by the Centre for Retail Research who have been analysing, evaluating and forecasting retail trends for more than 25 years show that, during the 2023 calendar year, a total 119,405 jobs were lost and 10,494 stores shuttered across the retail sector.
But compared to 2022 the number of store closures was down by -38.8% and the number of redundancies in 2023 was down by -21.3%. However, 2022 was retail’s worst year for store closures since 2008 – the year of the financial crisis and the collapse of Woolworths.
Professor Joshua Bamfield, Director of the Centre for Retail Research, says “this ‘improvement’ is probably best viewed as a trend that is ‘less bad’ rather than ‘good’ and doesn’t reflect any real strength in the sector.”
“The cost-of-living crisis, inflation and increases in interest rates have led many consumers to tighten their belts, reducing retail spend. Retailers themselves have suffered increasing energy and occupancy costs, staff shortages and falling demand that have made rebuilding profits after extensive store closures during the pandemic exceptionally difficult” Bamfield added.
Despite the fragility within the sector, the commercial real estate intelligence firm Altus Group, forecast that 43,160 ‘large’ retail premises in England, those with a rateable value above £51,000, will face a 6.7% inflationary increase in their business rates bills in April costing an extra £308.96 million in tax for 2024/25. This tax increase is the biggest year-on-year increase to the standard business rates multiplier since 1991 Altus Group added.
The collapse of retailers in 2023 was moderated by the fact that several of the most poorly run businesses, including Debenhams, Arcadia, Jessops and M&Co, failed in previous years.
Nevertheless, companies such as Wilko, Victoria Plum, Tile Giant, UK Flooring Direct and Planet Organic all collapsed in 2023. The failure of Wilko affected around 400 stores and 12,000 employees marking the biggest fall of a high-street icon since the collapse of Woolworths.
2023 saw a continuation of the trend started in 2022 where most store closures and job losses were as a result of company reorganisation and cost cutting programs rather than actual business failures, the Centre for Retail Research added.
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