Was Brexit the Nail in the Coffin for the UK High Street? - RETHINK
Europe

Was Brexit the Nail in the Coffin for the UK High Street?

The UK has been upended by a perfect storm of Covid-19 lockdowns, post-Brexit supplier issues and the burgeoning growth of e-commerce within the past two years, at a rate that seems to show little sign of slowing. 

Beginning with the cessation of beloved high-street department store BHS back in April 2016, British retail has seen the fall of many fashion brands in recent years.

These include internationally-renowned fashion giant Arcadia—whose subsidiaries included Topshop and Burton (acquired by online retailer ASOS in February 2021) and long-standing department store Debenhams (acquired by online retailer Boohoo in January 2021).

Amidst almost eighteen months of lockdowns within the UK, online fashion retail success boomed to unprecedented heights, despite being a sector already significant in its ecommerce penetration. Retail Economics and Eversheds Sutherland reported in October 2021 that “online sales of clothing rocketed by £2.7 billion over the course of the pandemic, but total sales fell by £9.6 billion”. 

Those with their origins firmly in the digital world have of course thrived, with The Guardian reporting back in April 2021 that ASOS “more than tripled first-half profits to a record £106m as [the online retailer] continues to benefit from the pandemic.”

With fewer overheads and an around-the-clock storefront, purely digital propositions seem set to monopolise the future of fashion—but, at what cost? 

Retail Weekly reported in November 2021 it is “predicted the accelerated shift to online shopping would result in a €17.6bn (£14.9bn) slump in sales at clothing stores across the next five years.”

Undoubtedly, this will bring about further liquidations and subsequent opportunistic acquisitions from online retailers.Yet, even for companies who make it out alive to join the new frontier of ecommerce; job loss is the ultimate casualty for retail workers. 

When Boohoo acquired Debenhams, a heritage department store dating back to 1778, the deal included “the brands and online businesses, but not the 214 shops nor 2,450 workers employed in them”.

Whilst the demand for warehouse workers increases with the flourishing of ecommerce and creates another funnel of job demand, the UK parliament reported that “women would be particularly at risk from job losses in the retail sector if the current trend of jobs shifting from stores to warehouses continues”.

All of these emerging factors create an unpredictable landscape for the imminent future of fashion retail, before we even consider any collateral damage as a result of Britain’s Brexit negotiations with the EU.

The cornerstone of digital retail’s success is its speed and efficiency; qualities that increased bureaucracy, international supplier issues and cross-border hold-ups are proving only to jeopardise as a result of the UK leaving the European Union. 

Whilst “71% [of UK fashion retailers] currently import from the EU” and “53% are experiencing cancelled orders as a result of Brexit”, Drapers reported in June 2021 that a staggering “98% are experiencing increased bureaucracy as a result of Brexit”— indicating a knock-on effect to not only bricks and mortar stores, but the online conglomerates who depend so heavily on their “next day delivery” services. 

It can be argued that supplier and logistical issues at large are more of an international concern post-Covid, with freight volumes slowly striving to build back up to pre-pandemic heights.

However, the RLI reports that the “contrast between footfall traffic in the UK’s most popular high street during the height of the pandemic and that of other European cities has been significant”, indicating that the Brits’ swerve from store-shopping is more endemic than its European counterparts.

If so, UK retail’s only saving grace could be its government’s hesitancy to reinstate any means of lockdown at this stage, whilst EU members such as The Netherlands and Austria are now revisiting such measures; cutting down retail hours with partial lockdowns in the case of NL, whilst Austria enters over three weeks of full lockdown until December 12th. 

Suffice to say, there is little set in stone for the future of fashion retail as a whole. As we enter the winter months, a natural displacement back to online shopping may emerge—whether lockdowns are announced or not – with 61% of UK shoppers alone saying “the pandemic will affect how they’ll shop for the holidays this year”, according to Google Consumer Insights.

Go to Top