Six reasons why retailers in the UK are unable to make ends meet

In one fell swoop DIY giant of registry was the latest on high street pound shop last week after its Australian owner, Wesfarmers offloaded loss-making services for a nominal amount of firm restructuring. The deal is expected to trigger a sharp pain on the high street, which is already shedding stores and jobs at a more rapid rate than during the recession in 2009. Major street names, including marks and Spencer, Debenhams, topshop and house of Fraser are also fighting. Friday homewares chain Dunelm has issued a profit warning, blaming “challenging” conditions. So why is life so hard on the high street?

Online rivals

It is no wonder that the street is under pressure as the Internet swallow whole about a fifth of all retail sales, while non-food sales online is increasing by 7.5% last year. Now smartphones are widely spread, you can buy a sofa for the bus designer handbag from the sofa or a new kitchen, while in bed.

The Internet has made life difficult for retailers in several ways. In addition to the direct diversion of sales that shoppers less reason to visit their high street, reducing the chances of small retailers draw in passing trade, with the cost and difficulty of building an infrastructure for the delivery of goods at home effectively hit on profits. As traditional retailers struggle to adapt, they’re pushing the online specialists such as asos, Amazon and resting a long tail of obsolete stores. The ease of comparing prices and access to goods from around the world gave more opportunities for those based in small towns, which are not restricted to local stores, making the competition tougher than ever.

The Internet also allows savvy shoppers to trade in goods between them much easier. Whether it’s bundles of children’s clothing selling on Facebook, fashion fans searching for Vintage on eBay or etsy, or teenagers flogging their unwanted impulsive purchases at the fast-growing mobile app Depop, the market is on the rise. In the United States fashion on the secondary market and offline is expected to increase by 13% between 2016 and 2021 to $33 billion, and a new specialist sites such as Hewi (barely worn) and a low price, as well as Depop is also expected that growth in the UK.




Online specialists such as Amazon are unobstructed long tail of obsolete stores. Photo: Jane Barlow/PA

Rising costs

As traditional retailers battle to the Fund of adapting their businesses to cope with the transition to the online stores, they hit the perfect storm of other rising cost. The depreciation of the pound sterling after the vote, leaving the UK has pushed up the cost of purchasing goods abroad. The impending exit from the EU and the declining value of the pound sterling has also acted on wage growth in some areas, it was harder to find skilled workers who traditionally come from Continental Europe, such as van drivers. The increase in the minimum wage and imposing a tax of discipleship, also contributed to rising costs, and increasing business performance this year. Although some companies have already seen a cut, and many small stores were protected in the South, particularly in London, there has been a significant increase in the interest rate. About 1,400 shops, pubs, restaurants and hotels, obtained according to the property Advisor to the group altus, on average, will grow by almost £50,000.

Fatigue consumption

After years of filling their wardrobes and houses with material goods, the British had reached “peak stuff.” Young people are now more likely to be renters, not buyers, meaning that they have no desire to fill the bottom of a box of goods, they may have to lug between a long-term lease. Information, credit card over the past year shows an increase of 10% of spending on entertainment and 11.4% increase in the expenditure on telecommunications, which of course, includes all those direct debits to pay for long-term phone contracts. Entertainment, pubs and expenses of the restaurant were all double digits last year, according to the credit card, but women’s clothes were. The latest data from Visa indicates that the cost of the goods for the house and clothes continued to fall, while restaurants, hotels, pubs and bars are still on the rise.

High street decline

Currently, retailers are closing stores faster than during the recession, but despite lying in a well-rehearsed questions, there is no agreed plan was to decide-straight drop. About 50,000 stores, are considered surplus and deputies recently launched a new investigation, with the aim of drawing up a vision of that on the main streets and city centres might look in 2030. There is no shortage of brain power devoted to the emotive themes; retail guru bill grimsey direction currently heads a special squad that is revising his influential review 2013. But while MPs and experts in the field of retail, to Bang their heads together, the pace of decline will only accelerate. Last week marks and Spencer announced plans to close 100 of its traditional Department stores by 2022 as sale online. The plight of m&S this means that large networks having a long history: stores opened on the once thriving streets surrounded by discount stores and fast food outlets. If buyers refused from the main street and shops are becoming more expensive as retailers should expect to stay?




The plight of m&S this means that large networks with a long history: stores opened on the once thriving high street is surrounded by discount stores and fast food outlets. Photos: Jack Taylor/Getty

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Bad management

Managers of retail networks have many excuses up their sleeves – from the weather to the declining attendance and the growth of the Internet for falling sales, but no one admits that they lack skills and vision. The world wide web exists for more than 25 years, so retail bosses had enough time to get used to the idea and to adapt your business. Almost 50% of the next £4 billion in sales rung up online, while last week marks and Spencer admitted that, despite spending the best part of £400m on his job site, he is still too clumsy and money thrown at it. There are obvious cases of bad governance, increasing the pressure created by the structural change bearing down on the main street of the city: the Colosseum, which employs more than 11,000 people, was sold for just $ 1 After his new Australian owners, Wesfarmers, have made terrible decisions that turned into a lucrative business, a large loss-maker; fighting our circuit can not convince parents to shop there, despite around 1,900 babies are born every day. Intelligence level of claims inexperience on the bosses of retail chains such as house of Fraser, which was included in a long list of household names that includes carpetright site, New look and lines of resorting to a company voluntary agreement (CVA), in the form of insolvency, lose their weak stores.




The Australian owners of the home in Wesfarmers, saw a profitable business be a massive loss. Photo: Alamy

Squeeze costs

Consumers simply ran away for a long period of falling real incomes and scars are visible on the high street.

Last year inflation to 3%, while wages remained stuck between 2% and 2.5%. According to experts paid the most wages of deals last year was closer to 2%. This is done to a serious decline of inflation-adjusted income and lower income of most buyers.

It should not be thus, employment at a record high and unemployment so low that she fell to levels last seen in 1970-ies. What many economists portray as full employment was intended to send wages are rising.

However, the quarter and month of uncertainty and the transformation of working life after self-employment, part-time and working hours, contracts more than offset the Pressure from rising vacancy direct incomes fall ago. Lack of investment in British business have also played a role while maintaining productivity and wage growth low.

To maintain their standard of living, consumers increased their borrowing, especially to buy cars and other expensive items. They will also reduce their savings. It is hoped that the reduction in the rate of inflation this year will allow real incomes to grow and the credit binge can be avoided. That’s what most forecasters expect that, despite the vicissitudes of a British exit from the EU can destroy this prediction.

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