5 Reasons behind the Crisis on UK High Streets

Many retailers in the UK have announced their financial troubles since the start of 2018. Toys R Us went into administration and have announced the closure of stores across the UK and US. Jamie’s Italian and Prezzo restaurants have announced closures. Carpetright is anticipating the closure of some of its stores, and Claire’s Accessories have filed for bankruptcy. But why are so many UK retailers having problems?


Since the start of 2017, the annual inflation rate has overtaken the annual change in average earnings. This means that consumers have less disposable income to spend on the high street.

Online Shopping

Many shoppers are choosing to browse online rather than visit stores. As well as being more convenient, many online retailers can charge less for the same product found on the high street because they don’t have the added costs of running a store.

National Living Wage

Retailers are having to deal with increased costs from not only inflation, but factors such as the National Living Wage, which means that minimum wages went up for over 25s. It is estimated that the National Living Wage cost the retail industry between £1.5bn and £3bn a year.

Too many shops

Many big retailers will open stores all over the country to become a household name. But it’s meant that retailers now have to close underperforming outlets because they are dragging profits down.


Before Toys R Us announced their collapse, they faced a large debt payment deadline of £15m. Without the help of an outside investor, they were unable to pay.