BLOG8 Many enterprises close the stores in UK

According to BBC news (2019), To save money, Sainsbury’s decided to close 60 Argos, 15 supermarkets and 40 convenience stores. In fact, Sainsbury’s has no way to deal with this problem, because of the bad weather and high marketing costs, which makes them income decline in recent years. It's down 50 million pounds from last year. And they hope to recover these losses within five years. Not only Sainsbury’s, but also other enterprises have closed down or even closed down due to the reasons such as the income is not optimistic. Debenham closed 22 stores in 2019 and was recognized by the court to save money for asset restructuring. (The Guardian, 2019), Moreover, Boots and Mothercare also decide to close some store to survive.

E-commerce is a factor that Impact on sales of physical stores and attraction to foot traffic. For example, Amazon as the largest e-commerce, 86% of British are Amazon members, more than half of whom think Amazon's price is lower. (365 RETAIL, 2019). Moreover, During the summer vacation, we investigated Newcastle's shopping habits. In 20 questionnaires, more than 60% of people think that online shopping is better, and this part is young people. The people who tend to shop offline are the elderly. This means that the future development trend is toward the direction of the Internet.

 Although almost half of Amazon members (45%) think that Amazon's emergence has led to losses in traditional industries and Amazon maintains 50% of e-commerce share, the sales volume only accounts for 9% of the UK and 82% of the sales volume is still in the real industry (365 RETAIL, 2019). Amazon's growth has hurt its competitors, but it's not a killer.

UK retailers have been plagued by weak sales due to the growing uncertainty about Brexit, which has led consumers to be cautious about making larger purchases before Brexit. In the past decade, under the government's austerity policies, families have also reduced their cost of living due to slow wage growth and welfare cuts. In addition, the average wage after inflation is still lower than the record before the financial crisis, reducing the consumption ability of households.

References:

BCC news (2019). 'Sainsbury's to close 60 Argos stores to cut costs'. https://www.bbc.co.uk/news/business-49822845. (Accessed on 6 December 2019)

The Guardian (2019). ‘Debenhams to close 22 stores: full list’. https://www.theguardian.com/business/2019/apr/26/debenhams-to-close-22-stores-full-list. (Accessed on 6 December 2019)

365 RETAIL. ‘Nine in ten Brits shop on Amazon’. https://365retail.co.uk/the-amazon-effect-nine-         in-ten-brits-shop-on-amazon/. (Accessed on 6 December 2019)