Retailers have seen weaker than expected sales during October, November and December which are usually critical months for the sector and highlight the ongoing tough trading conditions.  Consumers are holding off on purchases due to a mixture of low confidence and rising prices. 

The British Retail Consortium (BRC) found that sales growth for the so-called “golden quarter” between October and December was close to flatlining. 

For the three months to and including December, when many retailers traditionally make the bulk of their annual profits, the BRC said total UK retail sales growth was 0.4% year on year. 

Total sales for 2024 overall increased by 0.7% from 2023 which continues to highlight the cautious approach households are taking. This is born out from figures from Barclays that showed zero growth in consumer card spending in December. 

Early in 2025, they will also see the planned increase to employers’ National Insurance Contributions (NICs) alongside increases to the Minimum Wage which will add to the pressures faced across the sector.

The Centre for Retail Research (CRR) found that retail job losses increased by 42% in 2024 from the previous year with 169,395 retail positions being lost over the previous 12 months. 

This was the highest total since 2020 when over 200,000 jobs were lost as a result of the pandemic and subsequent forced closures during lockdowns. 

38 large retailers with multiple sites went into administration last year including Lloyds Pharmacy, Carpetright and Ted Baker. Overall administration accounted for approximately a third of all retail job losses last year (55,914) with the remainder coming as a result of cost-cutting programmes by large retailers or smaller independent stores closing. 

Retail employs 2.87 million workers in the UK, which is around 8.5% of all UK jobs according to the British Retail Consortium. 

They also found that retail vacancies are 30% lower than they were in the period immediately preceding the pandemic.

The CRR also found that on average 37 shops a day closed in the UK last year, 13,500 overall, which was an annual increase of 28%. These losses were still below the levels seen each year between 2019 and 2022. 

They expect store closures to rise by the same factor again this year which would see approximately 17,350 closures – the equivalent of 47.5 a day.

Professor Joshua Bamfield, director of the Centre for Retail Research, said: “The comparatively low job loss figures for 2023 now look like an anomaly or a pause for breath by many retailers after lockdowns if you like. 

“The problems of changed customer shopping habits, inflation, rising energy costs, rents and business rates have continued and forced many retailers to cut back even more strongly in 2024.

“With the increase of both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020”.

When it comes to store closures he continued: “While the results for 2024 show that although the outcomes for store closures overall were not as poor as in either 2020 or 2022 – they are still disconcerting with possibly worse to come in 2025.”

Retail is also facing another potentially expensive increase from April 1st 2025 with government plans to cut the business rates discount that retail currently has from 75% to 40% as announced in the Autumn Budget. 

In their election manifesto Labour pledged to “replace the business rates system in England, so we can raise the same revenue but in a fairer way. This new system will level the playing field between the high street and online giants, better incentivise investment, tackle empty properties and support entrepreneurship.”

In October, the Treasury published a discussion paper on how the government would actually deliver this pledge during this parliament.

If you’re a retailer or are involved in the supply chain or support industries then you might obviously be worried about what 2025 will hold if an already precarious economic landscape were to worsen. 

This is why we will continue to offer a free initial consultation to any business owner or director who wants to explore what options are available to them and their company. 

They might need temporary measures to stabilise their business while they consider their next moves or if they want to move onto a new challenge then we can explore options that would allow them to close with a minimum of stress and fuss.

Alternatively they might discover options they hadn’t considered to strengthen and protect their position. 

No matter what their aims and objectives for 2025, the sooner they get in touch with us, the sooner we can have that important conversation.