The wave of job losses is hitting the shore. Marks & Spencer’s announcement of a further 7,000 redundancies is a huge blow, compounded by the other troubling news from the retail sector. In the past couple of days, Debenhams, struggling to survive, has said it will shed 2,500 jobs; Dixons Carphone is losing 800; Selfridges, another 450.
Yet, and this may surprise, by June UK retail sales were already very close to pre-Covid levels in real terms and were up in money terms. While we don’t yet have official July figures, it looks as though retailing as a sector will now be running up on this time last year. The reason, of course, is the shift to online, which now accounts for more than 30 per cent of all retail sales, excluding fuel, up from 20 per cent pre-Covid. There are huge beneficiaries. Amazon is hiring some 15,000 more people. Ocado, which recently signed an agreement with M&S to launch its online services, is now worth £18bn. M&S shares have fallen so far that the group is worth little more than £2bn.
Whenever there is a huge structural change in the way we work and live there are winners and losers. What is different here from anything that has happened before is the pace of change. Online sales had been rising at about one percentage point a year: that move from zero to 20 per cent had taken 20 years. Now we have had 10 years of change crammed into three or four months. It seems – and this is all so new that the data are not yet available – that online retailing is inherently more efficient than in-store retailing. It uses fewer people and probably less energy.
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