River Island and the end of the high street?

National World - LocalTV

With the news that leading fashion retailer River Island is closing over 50 stores in the next two years, we take a look at the reasons behind this and how this might shape the high street in the future.

Transcript

00:00River Island has confirmed plans to close around 50 of its UK stores over the next two

00:07years. That's roughly a fifth of its current estate. The fashion chain says it's focusing

00:12on a more streamlined high street presence and investing more heavily in its online business.

00:17It's the latest example of a wider trend. In 2024 alone over 13,000 stores closed across the UK

00:24and projections suggest up to 17,000 more could disappear in 2025. At the same time,

00:31online retail continues to grow. Online shopping now makes up nearly 30% of all UK retail sales,

00:38a number expected to rise further. Some categories like video games and music are

00:43already overwhelmingly digital. Even charity shops like Scope have seen online sales jump by more than

00:4970% year on year. Footfall in many town centres still hasn't returned to pre-pandemic levels.

00:57With changing shopping habits, the convenience of e-commerce and squeezed household budgets,

01:01it's become harder for traditional stores to justify expensive leases on every high street.

01:08But it's not just about how people shop. Retailers are also facing a sharp rise in costs. From April

01:14this year, employer national insurance contributions went up from 13.8% to 15%, and the threshold at

01:20which businesses start paying NICs was lowered from £9,100 to £5,000. That means employers are now

01:27paying NICs on a much larger chunk of each salary, roughly a 50% increase on a £20,000 wage.

01:35Altogether, UK businesses are facing an additional £28 billion in NIC-related costs this year.

01:41For retailers specifically, the British retail consortium estimates the combined impact of

01:47NIC hikes and wage increases will cost over £5 billion. Sainsbury's, for example, says it will

01:53pay an extra £140 million this year alone. As a result, many retailers say they have no choice but

02:00to raise the prices, cut staff hours, or rethink their bricks and mortar operations. One trade body

02:06warns that the sector could shed more than 160,000 part-time jobs over the next 12 months.

02:13So what will the high street look like in five years' time? Experts say we're likely to see fewer

02:18chain stores and more variety. Pop-up shops, local independents, cafes, leisure spaces,

02:23even community services. Some retail space may be turned into homes or co-working hubs.

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