Total store numbers in the UK will fall by 22pc from 281,930 today to 220,000 in 2018 due to a seismic shift in shopping trends as consumer opt to go online. Eventually online will take over the majority of sales, according to a report by the Centre for Retail Research.
The report warns that 41pc of town centres will lose 27,638 stores in the next five years.
It found that job losses could be as high as 316,000 from today.
The share of online retail sales will rise from 12.7pc in 2012 to 21.5pc in 2018 or by the end of the decade.
There will be a further 164 major or medium-sized companies going into administration, involving the loss of 22,600 stores and 140,000 employees.
The Centre for Retail Research warns that many of these employees will survive, but at the cost of closing more than half their stores.
The UK has the highest proportion of online retail sales and what will happen there in the coming years will be closely watched globally.
The closure of major outlets like HMV and Game had ramifications for the subsidiaries of UK chains based in Ireland and the report’s warnings should be a wake-up call to Irish retailers who have yet to embrace online commerce.
According to the IEDR, less than 23pc of Irish SMEs are capable of transacting online.
Crisis on the high street
“The UK is facing a crisis,” the centre warned.
“Retailing and retailers will either make clear strategic decisions that permit online retail to co-exist with other retail channels in a multichannel world, allowing bricks and mortar retailers to transform themselves, or, by avoiding making these decisions, multiple retailers will disappear or be so mortally wounded that a large minority of business categories become dominated by purely online retailers.
“Much comment about retailing either sees shops as doomed (most shops will close as online takes over the majority of retail sales) or believes that online will peak, making the crisis shakeout in the industry (business as usual).
“In fact neither view is accurate, radical changes need to be made by retailers, town centres and the government to preserve what is best in retailing,” the report’s authors said.
The report’s authors pointed out that store vacancy rates across the UK have increased from 5.4pc in December 2008 to 14.1pc in March 2013, a rise of 161pc.
Without intervention, the vacancy rate could rise by a further 20pc.