The High Street is facing a wave of closures and job losses as sales slide and businesses grapple with soaring costs after the Budget.
In a bruising setback for the Chancellor, the British Retail Consortium (BRC) warned that chains will be ‘left with little choice’ but to slash investment due to higher National Insurance, business rates and wage bills.
Fears are mounting over the future of WH Smith’s 500 shops on the High Street and its 5,000 employees.
The fate of Boots is also unclear after its US owner was snapped up by buyout group Sycamore Partners last week.
Thousands of jobs have already been cut across the industry including at Tesco, Sainsbury’s, Morrisons, Quiz and Ocado.
Fears of a looming jobs bloodbath were ignited as non-grocery sales in shops fell 1 per cent in February compared to the same month in 2024, according to figures published by the BRC and KPMG.
Closures: In another setback for Chancellor Rachel Reeves (pictured), the British Retail Consortium said High Street chains will be ‘left with little choice’ but to slash investment
Fashion and homeware retailers had an especially poor month due to bad weather.
BRC chief executive Helen Dickinson said the dismal performance ‘makes many retailers uneasy’ ahead of £7billion-worth of new costs from the Budget.
‘The industry is already doing all it can to absorb existing costs, but they will be left with little choice but to increase prices or reduce investment in jobs and shops, or both,’ she said.
‘It is time for government to course correct to ensure investment and growth are not undermined.’
As well as introducing a raft of new workers’ rights, the Chancellor announced a £25billion increase in National Insurance and an inflation-busting hike in the minimum wage in the Budget in October. It is feared she could make further tax changes in the Spring Statement later this month.
Alarm bells over costs are ringing as WH Smith and Boots are set to fall into the clutches of private equity.
The stationery and books chain could even disappear from the High Street after more than 230 years as just two bidders – Bensons for Beds owner Alteri and Hobbycraft owner Modella Capital – remain in sale talks.
Retail experts said it was likely a new owner would sell off a number of shops.
‘Whoever buys it would need to close a large number of stores either way,’ said Jonathan De Mello, founder and chief executive of JDM Retail.
Similarly, there are concerns that the takeover of chemist Boots by US private equity firm Sycamore will lead to job losses and shop closures.
The deal is expected to result in parts of the business being sold by Sycamore – including Boots.
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