High street shops feel the chill from internet sales

A rise in closures is predicted in the next one to two years

Simon Neville
Tuesday 12 January 2016 02:23
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Business rates were blamed for placing a burden on shops in less ‘destination’ areas
Business rates were blamed for placing a burden on shops in less ‘destination’ areas

Swaths of high street shops are likely to close their doors permanently, as shoppers continue to shun city centres, head online and spend more on experiences rather than products, according to the head of the retail industry’s trade body.

Helen Dickinson, the director general of the British Retail Consortium, also warned that the Government must address the “unfair burden” on retailers through business rates, in a year during which the national living wage and the apprenticeship levy will be introduced.

Predicting a rise in closures in the next one to two years, she said: “Vacancy rates were going up in the early parts of the recession, then they bottomed out last year. But we can expect more store closures in less “destination” parts of the country – and that’s where the Government needs to offer a solution to the burden of business rates.”

Her warning came as the latest BRC/KPMG retail sales figures for December showed like-for-like sales barely rose – up just 0.1 per cent – and that was thanks to a 15.1 per cent rise in online sales. Stripping out online, sales on the high street were in negative territory.

It meant the last three months of 2015 were the weakest of the year, primarily pushed by the supermarket price war.

Furniture and homeware were big sellers, with Ms Dickinson suggesting the purchasing of big ticket items, such as fridges and sofas, which was delayed due to the recession, was finally picking up.

She added: “Some of that increase in disposable income and confidence is going into experiences and leisure activities. I think that’s the changing psyche of the shopper in a market when people have much more information on price and comparisons.

“The competition is that much more intense and people are wanting more experiences and less stuff.”

The winners and losers of the Christmas period are starting to emerge – with department stores John Lewis and House of Fraser both reporting decent sales. But the warm weather has hit clothes sales, as Marks & Spencer and Next suffered.

Morrisons becomes the first supermarket to update the market today, with sales expected to be down by as much as 3 per cent.

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