What is causing the retail industry's decline?
The retail industry has been very fickle in its success and decline during 2017 and 2018. Multiple retail chains appear to be in trouble, recently Marks & Spencer announced they will be closing 100 stores, shortly after Toys R Us have gone into administration.
The solution for many retail stores throughout the UK is to identify what has caused the decline in sales, and how to prevent it from happening if possible.
Possible reasons for the decline
“Beast from the east”
Towards the end of 2017 and the beginning of this year, the UK experienced very drastic changes in the weather. The “Beast from the east” snowstorm played a very important part in the reduction of retail sales, as people simply couldn't travel to their local retail shops due to the torrential weather. The Office for National Statistics estimates that there was a 0.1% increase for retail in January to April, which shows the storms clearly affecting shoppers’ interest.
Since higher inflation in 2017, due to the Brexit vote passing, it’s no surprise that the retail industry has taken a hit. The 3% increase meant that households had to review their spending and cut corners where they could. Casual spending and shopping trips obviously weren't feasible for some families, which is where you can explain the decrease in sales during 2017. Richard Hyman, a veteran retail advisor states, “I’ve been warning about this [crunch for retailers] for 15 years. The writing has been on the wall. It’s quite simple; there’s not enough spend and too many mouths to feed.”
Online shopping will always be the high street’s biggest competitor, it’s predicted that 18% of UK retail purchases will be made online in 2018. The appeal of online shopping is that customers can make a purchase from the comfort of their own home, and for some businesses, there is more choice online. Richard Hyman also agrees that online shopping isn't helping physical retail stores, “online retail hasn’t made the pie any bigger - it’s just been cannibalising it”