How B&M, Iceland and Wilko are closing stores
With the cost of living crisis hitting wallets hard, many shoppers in Britain have been forced to break their normal habits and head to budget stores for better prices on their weekly essentials.
But cut-price retailers aren’t immune to the tough economy either, as a number of well-known budget retailers such as Iceland, B&M Bargains and Wilko have had to close some stores in the UK.
One retail expert told MailOnline that “the culture of bargain-hunting for fun is over, at least for now”, adding that discounters that do not carry essential items “will struggle in the current environment”.
Iceland recently closed supermarkets in Bromsgrove in Worcestershire and Basingstoke in Hampshire, with four more due to open in the coming weeks in Rhyl and Bangor in north Wales, Bristol and Newport on the Isle of Wight.
Meanwhile, variety store B&M has closed stores in Newport in south Wales and Stockton-on-Tees in County Durham, with three more outlets in Kilmarnock, Belfast and Bristol set to open before the end of this month.
As for the Wilko homewares chain, some 15 stores have either left or will soon, including in Bournemouth, Birmingham, Shipley, Scunthorpe, Leicester, Grantham, Redditch, Rotherham, Skegness, Sutton Coldfield and Merthyr Tydfil.
In the hospitality industry, the Wetherspoon chain of budget pubs have also suffered and currently have around 20 outlets for sale across the country, although these will continue to operate as their pubs until or unless they are sold.
However, some discount retailers continue to do well, with the UK discount grocery market set to grow 23.9 per cent over the next five years according to IDG, with German supermarkets Aldi and Lidl leading the way.
Poundland is among those posting strong results, with the chain set to open 12 new stores in the coming weeks, including four in Glasgow, Partick, Rotherham and south London this month and eight more in April.
Last month rival Poundstretcher announced plans to open 50 new stores by the end of this year, while Home Bargains opened stores in Durham and Ramsgate over the past month and will do so in Preston on March 18.
Sophie Lund-Yates, Principal Equity Analyst at Hargreaves Lansdown, told MailOnline: ‘There’s no denying that the cost of living crisis has pushed more Britons to the buying end of the spectrum than ever before.
“This is a trend felt most acutely in supermarkets, where companies like Aldi are running out of market share, and big names have to compromise on margins in a bid to keep up with ultra-low prices.
“However, the culture of bargain-hunting for fun is over, at least for now. People are sniffing out low-cost essentials like groceries, but aren’t drawn to other discount stores in the same way.”
She said stores that “may have good value, but don’t carry essential items, are going to struggle in the current environment.”
Ms Lund-Yates continued: “So for some corners of the economy, such as discount supermarkets, the UK’s penchant for bargains is acting as a real boon, but at the same time, the real pressure on revenue It means that’s where the spending stops for a lot of households.
“For names like B&M and other big discount names, volumes are key rather than pricing power, so a continued decline in discretionary spending could spell big trouble for margins in the short to medium term.” .
B&M and Wilko are similar retailers in that they both sell a wide variety of household items, from furniture to electrical and stationery items to cleaning products, and they try to lure shoppers with deep discounts on popular items.
Wetherspoon told MailOnline that the pubs on the list for possible closure are “for sale and will continue to operate as Wetherspoon pubs until sold”, while Wilko confirmed that no further store closures were forecast in addition to the current list. MailOnline has yet to receive any responses from Iceland or B&M.
Earlier this week, Barclays figures showed consumer spending grew just 5.9 percent year-on-year in February as Britons continue to cut non-essential spending.
The figure was affected by the lifting of Covid restrictions last year, which led to a surge in spending due to pent-up demand, bringing down this year’s figures.
However, supermarket spending growth slowed to an increase of just 6.6 percent, with 49 percent of consumers cutting back on luxuries or unique treats for themselves and 48 percent turning to supermarkets. value ranges.
Nearly a third of Britons (30 per cent) say they aim to reduce their Easter spending due to rising costs, with 25 per cent of these people planning to spend less on Easter eggs and 22 per cent cutting back on Easter eggs. vacation plans.
Also this week, the British Retail Consortium said retail sales held up better than expected last month as consumers showed they are still ready to celebrate events like Valentine’s Day despite the cost of living crisis. .
Total UK retail sales rose 5.2% in February compared with an increase of 6.7% in the same month last year, below the three-month average of 5.5% and above the 3-month average. 12 months of 2.4%.
That was according to the BRC-KPMG Retail Sales Monitor, which also found that food sales rose 8.3 percent for the three months to February and non-food sales rose 3.2 percent.
The High Street has suffered a torrid decline in recent years that has been exacerbated by the pandemic as shops closed and many Britons switched to online shopping for good.
The Center for Retail Research found 47 stores on average last closed every day last year. The total of 17,145 that closed in 2022 was nearly 50 percent higher than the 11,449 stores that closed in 2021, during the pandemic.
Big names to have exited the High Street in recent months include Paperchase, which went into administration in January but whose brands and logo have now been bought by Tesco.
Meanwhile, Scottish clothing retailer M&Co will close all of its 170 stores across the UK this Easter after going into administration last December. Nearly 2,000 jobs will be lost because of this.