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The impact of 20 chain stores closing every day

The Guardian has published the following story:

“Chain retailers closing 20 stores a day”

Their figures come from the Local Data Company, which estimates that 4,000 shops have closed down so far this year.  Whilst this is not a number netted against store openings, it nevertheless represents a massive change that is affecting every high street and mall in the country.

It takes quite a lot for retail failures and job losses to become big news.  The slew of administrations that followed the June quarter day included an iconic brand (Habitat) and a well-loved provincial stalwart (TJ Hughes), but the epitaphs have now been read and the crowd has moved on, while thousands of shop workers lose their jobs.

One of the reasons for this relative indifference is that retail failure is spread thinly across the geographical landscape of the UK.  There was plenty to write about Terence Conran, Ikea and changing taste when Habitat failed, but with just 30-odd stores closing, only a small minority of the population will notice the stores’ absence when the closing down sales end.  Only Woolworth, with 800 shops, has cut through this indifference in recent years, as every one of us had a local Woolworth, with memories to share and (in a great many cases) youth employment or pick’n’mix theft stories to reminisce about.

The job losses at the Bombardier railway carriage works in Derby are much more newsworthy, with newspaper editorials, questions in parliament and much soul-searching from commentators.  This is understandable – the loss of 1500 jobs in one medium-sized town, with the knock-on loss of suppliers’ jobs, many also in the East Midlands, has a far greater impact on the regional economy than the steady, inexorable drip-drip of retail job losses.  (And Bombardier should have been at the forefront of Britain’s sputtering manufacturing comeback – whereas in retailing, we are an established world power.)

However, the shop closures will continue, and wise retail observers are all agreed that there is more pain to come – there’s another tranche of retailers looking unsteady, and the next quarter day, or a less-than-great Christmas, will kill them off.

At the same time, it would be interesting to dig deeper into Local Data’s numbers to understand how many shops are being quietly shuttered by trading retailers.  I should be very surprised if any established fashion chain, for instance, ended 2011 with more stores trading than it had at Christmas 2008.  Retail Week reports today that Clinton’s is considering succession as founder Don Clinton retires, and remarks, almost en passant, that the company has reduced store numbers by 500 since 2006 – a fall of nearly 40%.  Of course Clinton’s has had the Birthdays Horror, and other channel changes to contend with, but for most today, smart retailing equals a consolidation of store numbers, with online fulfilment picking up the slack and “quality shopping” becoming concentrated into about 80 locations across the country.

The closures are also a necessary part of the destructive cycle of the capitalist system.  I believe that it is exceptionally hard for businesses to change their core purpose – particularly if they are tied into multiple long leases on multiple different properties, spread across the country.  It would take an investor with nerves of steel, for instance, to have gambled 30 years ago on much of furniture retailing moving from high streets to vast out of town sheds.  How much would it have taken to transform Habitat into Ikea, before Ikea arrived; or to turn TJ Hughes (or indeed Woolworth) into Poundland?  Even if the rationale is solid (and plenty of observers were encouraging Woolworths to take a “dollar store” route before they fell), it is exceptionally hard to rationalise a store portfolio of hundreds of stores into an unproven new model.

Not impossible – Hepworths became Next, and Chelsea Girl/Concept Man begat River Island – though in both those cases the new brand fitted comfortably into the old brand’s physical spaces.  Usually, however, it’s easier and more efficient – and much more painful, in terms of its impact on employees and creditors – to let the capitalist model take its course.

Photo: 2ergo.co.uk

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One Comment on “The impact of 20 chain stores closing every day”

  1. […] The Guardian has published the following story: "Chain retailers closing 20 stores a day" Their figures come from the Local Data Company, which estimates that 4,000 shops have closed down so far this year.  Whilst this is not a number netted against store openings, it nevertheless represents a massive change that is affecting every high street and mall in the country. It takes quite a lot for retail failures and job losses to become big news.  Th … Read More […]