Analysis of: Worst year for High Street job losses in 25 years

Original article: https://www.bbc.co.uk/news/business-55501049

In summery, this article outlines the prominent reasons that more high street jobs were lost this year than any year in the last 25. Although coronavirus was one of these reasons, it was not the only one.

High street retail stores have been struggling for the last five years and corona virus has only accelerated the decline in popularity. The primary reason for job losses in the high street sector is due to the decrease in profits in the shops. Less profit means that revenue has decreased or costs have increased. Due to no significant tax increases in the last five years that affect high street shops, it must be revenue that has decreased. In other words, effective demand for walk-in shops has fallen.
This decrease in demand before the virus was because of one thing in particular: online shopping. Online shopping is an alternate good to in-person shopping. Shopping online is easier, cheaper and quicker. This means that there is a higher opportunity cost to go to the shops rather than shop online. With the internet becoming far more popular in recent years, online shopping has become far more accessible to all, and has therefore increased in demand.
An increase in demand for a competitor means that there is a decrease in demand for the high street itself. The significant decrease in revenue means that the small, local businesses cannot afford too many staff, and many lost jobs.
Furthermore, long before corona virus hundreds of thousands of retail jobs were lost every year; 117 thousand jobs were lost in 2018, according to the Centre for Retail Research. This shows how much online shopping has hurt the high street.

Of course, 2020 saw many unforeseen circumstances like coronavirus and this killed retail stores even further. It is estimated that 3,400 retail jobs were lost each week this year. Once again this is because of a decline in profits; however, both revenue decreased and costs increased this year.
Profits decreased due to the fact that no one was allowed outside for 6 months and therefore the public couldn't go into shops to buy goods. Even when they could shop, consumer confidence was extremely low. As well as that, many incomes across the world declined this year so they couldn’t buy as much. These are just three of the reasons revenue decreased in retail shops.
Costs for all shops increased this year due to new enhanced cleaning and corona-safe redesigns. As well as that all returned items need to be quarantined. This increased costs for small and large shops substantially. This reallocation of resources meant that there wasn’t enough purchasing power left to have staff so many were furloughed or let go.