Worrying reason high street giants shut up on Boxing Day ‘revealed’ and it’s bad news for January sales’ shoppers
BOXING Day sales fell flatter than a Christmas pudding this year, as shoppers stayed home in droves and major retailers closed their stores.
More than 7,500 shops – including big names like Marks & Spencer, Next, and John Lewis – remained closed on December 26.
While these retailers cited giving staff a well-deserved break as the primary reason, industry experts point to a combination of factors contributing to the closures.
Rising staff costs, particularly holiday pay premiums, coupled with increased energy bills and the convenience of online shopping, have made opening physical stores on Boxing Day less profitable for some businesses.
Insolvency expert Julie Palmer told MailOnline that staffing costs were “breaking the back” of some shops.
Palmer, a partner at restructuring firm Begbies Traynor, also warned that the outlook is “not looking good” after lacklustre Christmas trading could leave many firms facing potential collapse at the start of the New Year.
She said: “The first three months of 2025 could be one of the most perilous quarters for retailers in recent years.”
Begbies Traynor’s latest data shows that the number of UK retailers in “critical financial distress” hit 2,124 in the last three months of the year – a 25% increase from the preceding quarter.
Further data from Rendle Intelligence and Insights revealed that shopper numbers on the High Street in the final week before Christmas were 11% lower than last year.
Additionally, shopping activity on the morning of Boxing Day was down nearly 9% from last year, reflecting a continued decline in footfall.
It comes as businesses brace for National Insurance and minimum wage increases announced by Chancellor Rachel Reeves in October.
Employers currently pay NICs for most workers earning more than £9,100 a year.
The sum they pay is the equivalent of 13.8% of the employee’s earnings above that threshold.
For an employee earning £30,000, the employer would pay NICs of £2,884.20.
However, in the Autumn Statement, the Treasury announced it would increase the tax rate to 15% and reduce the threshold at which firms must pay to £5,000.
The British Retail Consortium has predicted that these changes will create a £2.3billion bill for the sector.
More than 70 businesses, including Tesco, Asda and Sainsbury’s, told Rachel Reeves in an open letter that the changes announced in the Autumn Budget mean price hikes are a “certainty”.
MORE JOB LOSSES ON THE WAY
Almost 170,000 retail workers lost their jobs during 2024 after a challenging year for high street firms, according to data.
End-of-year figures compiled by the Centre for Retail Research showed the number of job losses spiked amid the collapse of major chains such as Homebase and Ted Baker.
It said its latest analysis showed that a total of 169,395 retail jobs were lost in the 2024 calendar year to date.
This was up 49,990 – an increase of 41.9% – compared with 2023.
It is the highest annual reading since more than 200,000 jobs were lost in 2020 in the aftermath of the Covid-19 Pandemic, which forced retailers to shut their stores during lockdowns.
The centre said 38 major retailers went into administration in 2024, including household names such as Lloyds Pharmacy, Homebase, The Body Shop, Carpetright and Ted Baker.
Around a third of all retail job losses in 2024, 33% or 55,914 in total, resulted from administrations.
It recorded that the remainder of the jobs lost were through “rationalisation”, as part of cost-cutting programmes by large retailers or small independents choosing to close their stores for good.
Professor Joshua Bamfield, director of the Centre for Retail Research, said: “The comparatively low figures for 2023 now look like an anomaly, a pause for breath by many retailers after lockdowns if you like.
“The problems of changed customer shopping habits, inflation, rising energy costs, rents and business rates have continued and forced many retailers to cut back even more strongly in 2024.”
Independent retailers, small businesses generally with between one and five stores, shed 58,616 jobs in total during the year.
Experts have said small high street shops could face a particularly challenging 2025 because of Budget tax and wage changes.
Professor Bamfield warned of a bleak outlook for 2025, predicting that as many as 202,000 jobs could be lost in the sector.
“By increasing both the costs of running stores and the costs on each consumer’s household it is highly likely that we will see retail job losses eclipse the height of the pandemic in 2020.”
Which retailers went bust in 2024?
DURING 2024, 27 retailers of all sizes went bust, affecting 886 shops and 17,939 employees, according to the Centre for Retail Research.
The number of casualties is more than half the previous year’s rate of retail collapses, when 61 chains failed and 971 shops were impacted.
Here, we explain some of the biggest retailers that got into trouble in 2024….
Sook
Sook was one of the first retail casualties of 2024 and was particularly depressing as it was meant to be the answer to empty high street stores.
The business operated 12 pop-up shops across the country in London, Birmingham, Southampton, Liverpool, Newcastle and Leeds and made high street space available for online brands like TikTok.
Tile Choice
Tile Choice, a Midlands-based flooring retailer with 18 shops, went into administration in January 2024.
Nine stores were snapped up by rival Tile Giant but the rest were not saved.
The business had 116 staff and £16million turnover in the last financial year, but had struggled with a slowdown in spending.
LloydsPharmacy
LloydsPharmacy, once the UK’s second biggest community pharmacy chain, went into liquidation in late January with debts of £293million.
The previous year it had closed all of its pharmacies inside Sainsbury’s and divided its 1,000 pharmacy estate into packages of hundreds of stores that it then sold to rivals in smaller deals.
There are no more LloydsPharmacy-branded sites on the high street, but it continues to operate online.
The Body Shop
The Body Shop filed for shock administration in February, just four months after being taken over by restructuring firm Aurelius.
Administrators immediately closed 75 of its 198 UK stores and made cuts to its head office while its international divisions were also declared bankrupt.
It took seven months for a rescue to be sealed with British cosmetics tycoon Mike Jatania in a deal that has kept 113 shops trading.
Matches Fashion
Matches Fashion, the designer clothing online retailer, was put into administration in March, less than three months after it was bought by Mike Ashley’s Frasers Group.
Frasers Group bought the business for £52million but said it was too heavily loss-making to turn around and closed it down.
The firm was founded 30 years ago by husband and wife team Tom and Ruth Chapman, who made £400million when selling the business to private equity firm Apax in 2017.
Ted Baker
Designer clothing and accessories brand Ted Baker initially filed for administration in April after the company that ran the brand in the UK also went bust.
At the time, Ted Baker had 46 shops in the UK employing around 975 people.
The business had been taken private by US firm Authentic Brands Group in a £211million deal.
The last stores shut in August after failing to secure a full rescue. It was relaunched as an online brand in the UK and Europe after a partnership with United Legwear & Apparel Co.
Muji
Japanese brand Muji, which had six stores in the UK including five in London’s busiest shopping streets, went into administration at the end of March.
The retailer had been popular with shoppers who liked its minimalistic stationery and homewares.
It was saved after a rescue deal with its parent company.
Carpetright
Flooring retailer Carpetright filed for administration in July after efforts to turnaround the struggling firm were derailed by a cyber attack.
The business had 1,800 staff and 273 shops across the country before going bust.
Around 54 stores were snapped up by its arch-rival Tapi Carpets & Floors, which also bought its brand name and continues to run the brand online.
The Floor Room
The Floor Room was owned by the same parent company behind Carpetright, Nestware Holdings.
The business traded out of 34 John Lewis concessions and employed 201 people.
The firm also relied on Carpetright for a number of its essential customer support services and could not survive on its own.
Homebase
DIY chain Homebase collapsed in November after years of struggles.
The business had around 130 shops across the UK and had been owned by restructuring firm Hilco, which bought the business for a single £1 in 2018.
Australia’s Wesfarmers had briefly owned Homebase in a disastrous attempt to break into the UK market.
Westfarmers bought Homebase in 2016 after Sainsbury’s £1 billion purchase of Argos triggered a break-up of Home Retail Group.
The brand and some stores have been partially rescued by billionaire Chris Dawson, the owner of The Range and Wilko.