William Hill Plc has just marked an important moment for the U.K. high street.
The company said on Thursday that it had entered into a consultation process with employees over plans to close about 700 licensed betting offices, with the loss of up to 4,500 jobs.
The crisis has been sparked by changes in regulation that limited the maximum stake on fixed odds betting terminals, a staple of the company’s shops, to 2 pounds. The result was that gamblers were losing a lot less on these machines than previously. Consequently, William Hill was making less profit on each location.
While the change might underline the damage that fixed odds betting terminals were previously inflicting on society – they were dubbed the crack cocaine of the gambling world – there will be a knock-on effect on the high street. The difficulties that have plagued Britain’s retailers and stores for years are now coming to a head, and the time has come to adopt a new approach to the nation’s shopping districts.
Betting shops are particularly symbolic.
The global financial crisis sparked the first wave of U.K. high street store closures. William Hill and its rivals, along with charity shops and pawnbrokers, were among the businesses that took up the slack. As the economy recovered, they were joined by swathes of casual dining restaurants and coffee chains.
Now, the very sectors that have been propping up the high street for the past decade are losing the battle against fragile consumer confidence and the shift to spending on experiences rather than things, be that a set of false eyelashes or a streaming service.
Even though the number of food and beverage outlets rose in 2018, according to the Local Data Company, many chains have closed locations after expanding too fast. Drugstores are also poised for restructuring – last week, Boots confirmed it planned to close 200 stores by 2021.
Beauty and hairdressing has been a bright spot. But if a no-deal Brexit or economic downturn squeezes incomes, this is another area where consumers could rein in spending. Asda, the U.K. arm of Walmart Inc., is offering face masks and body scrubs costing just a few pounds this Christmas because it believes Brits might choose to pamper themselves at home rather than spend money on the salon.
And let’s not forget the continuing pressure on U.K. retail, particularly fashion. Monsoon Accessorize is the latest chain to achieve lower rents after it won the backing from landlords for a Company Voluntary Arrangement. This follows the Arcadia CVA a few weeks earlier, which will result in dozens of store closures and reduced rents at 200 locations.
Though the biggest candidates for potential CVAs may have now gone ahead with their restructurings, the pain for landlords is not over. There is every possibility that those that have undergone the process will have to seek a second one.
It’s hard to see what can fill the holes that are being left in shopping districts by the departure of the likes of William Hill. The way forward has to involve repurposing these locations. Turning them into residences, offices or even new businesses catering for the needs of the growing elderly population could be a start. Because with Brexit not even achieved yet, there’s hardly a glimmer of hope that Britain’s high streets can be restored.
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