Retail Shockers – Arcadia & Debenhams announcements just 14 hours apart
Tom Hall, Chief Economist at Barbour ABI and AMA Research helps to breakdown the impact of the announcements from Arcadia and Debenhams and what that means for the retail sector as a whole.
“With the news of Arcadia falling into administration and the winding up of Debenhams coming just 14 hours apart, the UK retail sector has just experienced a shock of great magnitude. Several familiar names are likely to disappear from our high streets.
With a staggering 25,000 jobs at risk, it will be a very hard Christmas for all those affected, adding to many more already struggling after a torrid year. Those in the retail and hospitality sectors have been disproportionately affected, with younger women being hit most severely.
For the retail sector, the Covid-19 pandemic has magnified and accelerated the structural shifts already underway. Those who have been best placed to gain from the shift online this year have been able to do so and have reaped sometimes sizeable rewards. For those who have lagged and were already struggling in a competitive marketplace with jaded propositions, especially those with large debt levels, the shift has accelerated the decline. Even with government support schemes in place, fixed costs such as rents on premises and debt repayments still need to be made.
We are seeing fast-paced structural change elsewhere. For example, many have been quick to proclaim the “death of the office” but we are more likely to see a move to mixed working and more flexible office space in the future, and at a slower pace than many expect. Consumers are demanding more environmentally friendly and sustainable goods than ever before. In the public and infrastructure sectors we are seeing more willingness to trial new technologies and greater use of public-private partnerships. Understanding what these changes are, their scale, and when and where they occur are going to be critical to be able to plan how to move and adapt.”
At AMA we are able to help you understand these structural changes.
- Our bespoke construction forecasts, built from Barbour ABI’s unrivalled planning data, can provide forecasts at the sub-sector and regional level to understand where activity is going to take place in the future.
- Our market reports cover all market and construction sectors, including the retail and office sectors. We will be expanding on these themes of change next year, with series including themes on environmental construction and the changing nature of work providing a comprehensive view of changes already underway and those happening in the future.