A challenging start to 2023 for high-street retailers in the UK as companies deal with several bankruptcies and restructurings, including the loss of 15,000 jobs. As retailers struggle due to the declining consumer purchasing power, experts have warned of “the terrible start of the year.”t
Job Cuts Might be Higher Than the Available Data
The Centre for Retail Research found that at the beginning of 2023, 14,874 positions had already been removed or were scheduled to be eliminated. This study covers shop closures by major retail chains in the UK with 10 or more shops. This implies that if struggling independent stores are considered, the actual number of jobs lost might be far greater. It was also discovered that 3,185 of these layoffs are attributable to businesses that are going through some insolvency process. Chains like Paperchase and M&Co, which both entered administration in February, are among them.
Retailers Giants Tesco, Asda, and Wilko to Cut More Than 12,000 Jobs
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While businesses in the UK try “rationalization” to reduce costs, 11,689 more job cuts have been made. Since the beginning of last month, Tesco, Asda, Wilko, and New Look have all made job cuts to save some capital.
“The process of rationalization will continue at pace as retailers continue to cut their cost base,” said Professor Joshua Bamfield of the Centre for Retail Research.
“With a terrible start to the year, we will unlikely see much relief in employment losses in 2023. Lower consumer spending power and hefty corporate rates will hurt many retailers.”
Retail Companies’ Costs Could Drop 20%
Nevertheless, this is due to reset on April 1 in a countrywide reevaluation that will benefit hundreds of enterprises in the UK. According to the Government, the retail industry would “see its overall costs paid cut by 20%,” with enterprises additionally receiving a 75% reduction of up to £110,000.
According to Alex Probyn, worldwide head of property tax at real estate advisor Altus Group, “the truth is that most multiple retailers would only benefit from the job cuts on a fraction of their outlets given the cap.”
“Although the changes brought about by the revaluation are commendable, 10% overall just does not go far enough given the position of the market on the valuation date, which is likely to lead to a tsunami of appeals,” he added.
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