There is no sign of the post-Covid bloodbath on the High Street ending anytime soon. That’s certainly the view of UK retailers as they scale back investment plans, faced with the very real prospect of administration.
The Confederation of British Industry (CBI) reveals in its quarterly survey of retailers that they intend to cut investment by more than at any time in almost six years. It blames generally weak consumer spending and rising costs for the balance of intentions (0% being neutral) sinking to its lowest since May 2019 at -56%, sharply down from -27% in November.
The impact of the autumn budget, which unveiled a £25bn rise in employers’ National Insurance contributions, among other cost hikes, has further dampened retailers’ recovery hopes; they have already been dashed by customer demand not responding to wages rising faster than inflation.
This fresh period of woe follows the crippling increases in energy and raw material costs triggered by the invasion of Ukraine in 2022. It’s little surprise that close to 13,500 retail stores closed in the UK during 2024, according to the Centre for Retail Research, up 28% on 2023.
So far in 2025, high street fashion chain Quiz has fallen into administration, closing 23 shops and cutting almost 200 staff. Homebase, already in administration, is accelerating store closures, while major supermarket chains have announced sweeping redundancies.
Before the first Covid lockdown in March 2020, higher rents and painful business rates for physical stores were driving the retreat of retailers from town centres. They were already struggling to grip structural changes in the sector resulting chiefly from a migration of customers online.
Many left on the High Street or in retail parks are turning to Artificial Intelligence (AI) and automation, such as self-scanning, to battle rising staff costs. The ultimate impact of AI, which is already revolutionising retail warehousing and stock control, is unknown; the ‘given’ is that retailers under pressure need to be quick to adapt where they can, or take drastic action where their problems are existential.
It’s clear that further interest cuts won’t necessarily kickstart consumer spending and generate a more benign retail environment. Those operators intending to survive need urgent strategies for:
- Tenancy and rent issues
- Store closures
- Stock control and working capital
- Technology and operating efficiencies
- Relationships with suppliers
- Trading with international partners
- Banking arrangements
- HMRC ‘time to pay’ plans
Buchler Phillips welcomes ‘no-obligation’ exploratory discussions with managers and owners of retail businesses to cover all the above factors and more.
Written by Alice Fanner, Assistant Manager at Buchler Phillips, a UK based independent boutique firm with an impeccable Mayfair heritage, specialising in corporate recovery, turnaround, restructuring and insolvency.