Consumers in the UK are moving their fashion spend online. A lot of their discretionary spend is going toward leisure activities. There has been a dip in demand for clothing, toys and household appliances.
And fashion retail lost out big time last year as more stores than ever closed. Closures outpaced store openings in 2016 for the seventh year running as chain stores, those with five branches or more, closed down to the tune of 5,430 units, compared to 4,534 opening. That left a gap of almost 900 stores, which was nearly double the closure gap in 2015.
Fashion is migrating online at a faster rate than ever, leaving closures in its wake. The only good news for fashion was that jewelry stores were among the fastest growing physical outlets last year.
The face of UK high streets is evolving with the fastest growth being seen for health clubs, coffee shops, and fast food locations. However, last year was relatively benign for restructuring and insolvency in all sub-sectors of retail, so the net closures point to structural changes in customer behavior more so than a consumer slowdown.
Retailers face the dual pressures of cautious consumers and rising operating costs. Transport costs are up.