Over 175,000 UK retail jobs lost in 2020

Over 175,000 UK retail jobs were lost in 2020 in what was a year of unprecedented difficulty for the sector, as the strain of extended store closures pushed many to the point of collapse.

According to figures from the Centre for Retail Research (CRR), a total of 176,718 jobs were lost last year from high streets, main shopping destinations, towns and villages, as well as small shopping parades and isolated stores across the UK.

That’s up by almost a quarter on the 143,128 overall jobs lost during 2019, and equates to about 3,400 jobs lost in the sector each week.

Business falling into administration resulted in 71,811 job losses. Topshop-owner Arcadia alone put around 13,000 jobs at risk when it fell into administration last month.

The CRR said 47 percent of employees in companies that fell into administration lost their jobs. In comparison, during the 2008 recession only a third of employees of insolvent retail companies lost their jobs “demonstrating that companies which went bust during 2020 were much larger with the effects on staff numbers more pronounced”.

Unprecedented year of difficulty for retail

A further 11,986 jobs were lost through company voluntary arrangements, a contentious insolvency procedure used to close loss-making stores.

A long list of fashion retailers launched CVAs last year, including LK Bennett, Ann Summers, Moss Bros, Clarks, New Look, AllSaints, Bair Group and Monsoon Accessorize.

An additional 92,921 jobs were lost through “rationalisation” as part of cost-cutting programmes by large retailers or small shops simply shutting for good - up 18.3 percent on 2019.

Professor Joshua Bamfield, a director at the CRR, warned of more pain to come for the sector in 2021 and said up to 200,000 more jobs could be lost.

“Our forecast is based upon a number of factors such as the cumulative effects of months of closure and its impact upon cash flow and rent arrears that will be payable when the moratorium ends,” Bamfield said.

“Whilst the longer-term effects of the greater use by shoppers of all kinds of online retailing is likely to be hugely damaging for physical stores.”

Photo credit: Unsplash

 

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