Wake-up call for retailers in multi-channel world
The Centre for Retail Research (CRR) has published its outlook for the UK retailing sector in 2018, with key forecasts as follows:
- Total store numbers will fall by 22%, from 281,930 today to 220,000 in 2018.
- Job losses could be around 316,000 compared to today.
- The share of online retail sales will rise from 12.7% (2012) to 21.5% by 2018 or the end of the decade.
- There will be a further 164 major or medium-sized companies going into administration, involving the loss of 22,600 stores and 140,000 employees. Many of these companies will survive but at the cost of closing more than half their stores.
- In spite of the Portas Pilots, the High Street will continue to suffer: around 41% of town centres will lose 27,638 stores in the next five years.
According to the independent analyst, UK retailing has the highest proportion of online retail sales, so what happens here is being closed watched by foreign observers as Britain becomes a test bed for retail innovation.
The CRR believes that customers are actively shunning the High Street meaning that online retail is set to account for 21.5% of total retail sales by 2018, up from 12.7% today.
In a wake-up call, the report states: “Retailing and retailers will either make clear strategic decisions that permit online retail to coexist with other retail channels in a multichannel world … or by avoiding making these decisions, multiple retailers will disappear or be so mortally wounded that a large minority of business categories become dominated purely online retailers.”