The retail industry is facing tremendous pressure from the growth of online-only brands such as Boohoo, ASOS, and MissGuided. As per a UK financial publication, Zara owner Inditex reported 14 per cent lower sales of €6.05billion during the three months ended October, which is 14 per cent lower than a year ago. The retailer's net income fell 26 per cent to €866million while its operating and inventory costs declined 10 per cent and 11 per cent respectively in the third quarter. The retailer follows a sales model based on fast fashion with higher sourcing exposure from Turkey and North Africa, sophisticated stock management, and consolidation around flagship stores.

On the other hand, the H&M sales model is based on predictable basics from Asia and India, keener pricing, and a simple website. Production lead times from China and Cambodia are typically four to six months whereas Zara’s products can be in store from Turkey and North Africa in just three weeks. Between June and September, Britain lost 78,000 jobs in the retail sector which shows jobs outlook for the sector remains dismal, says Helen Dickenson, Chief Executive, British Retail Consortium.

Though the government's furlough scheme had been effective in preventing job losses in the previous quarter, the industry still shed 78,000 jobs between June and September this year. The pandemic has already seen multiple retailers fall by the wayside, costing shops and jobs, and retailers face further costs in 2021 from both Brexit and the return to full business rates. The combined impact of COVID, Brexit and business rates is likely to significantly impact retail employment in the future.

Dickenson advised the government to provide continued targeted support to those firms most heavily impacted by the pandemic. By supporting retailers in their return to full health, the industry will be better positioned to bolster the country's economic recovery, she said.