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Report
River Island and the end of the high street?
National World - LocalTV
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yesterday
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.
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00:00
River Island has confirmed plans to close around 50 of its UK stores over the next two
00:07
years. That's roughly a fifth of its current estate. The fashion chain says it's focusing
00:12
on a more streamlined high street presence and investing more heavily in its online business.
00:17
It's the latest example of a wider trend. In 2024 alone over 13,000 stores closed across the UK
00:24
and projections suggest up to 17,000 more could disappear in 2025. At the same time,
00:31
online retail continues to grow. Online shopping now makes up nearly 30% of all UK retail sales,
00:38
a number expected to rise further. Some categories like video games and music are
00:43
already overwhelmingly digital. Even charity shops like Scope have seen online sales jump by more than
00:49
70% year on year. Footfall in many town centres still hasn't returned to pre-pandemic levels.
00:57
With changing shopping habits, the convenience of e-commerce and squeezed household budgets,
01:01
it's become harder for traditional stores to justify expensive leases on every high street.
01:08
But it's not just about how people shop. Retailers are also facing a sharp rise in costs. From April
01:14
this year, employer national insurance contributions went up from 13.8% to 15%, and the threshold at
01:20
which businesses start paying NICs was lowered from £9,100 to £5,000. That means employers are now
01:27
paying NICs on a much larger chunk of each salary, roughly a 50% increase on a £20,000 wage.
01:35
Altogether, UK businesses are facing an additional £28 billion in NIC-related costs this year.
01:41
For retailers specifically, the British retail consortium estimates the combined impact of
01:47
NIC hikes and wage increases will cost over £5 billion. Sainsbury's, for example, says it will
01:53
pay an extra £140 million this year alone. As a result, many retailers say they have no choice but
02:00
to raise the prices, cut staff hours, or rethink their bricks and mortar operations. One trade body
02:06
warns that the sector could shed more than 160,000 part-time jobs over the next 12 months.
02:13
So what will the high street look like in five years' time? Experts say we're likely to see fewer
02:18
chain stores and more variety. Pop-up shops, local independents, cafes, leisure spaces,
02:23
even community services. Some retail space may be turned into homes or co-working hubs.
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