River Island and the end of the high street?

Local TV

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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