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Features

Why the High Street Still isn’t Safe…

This week has seen clothing store Jane Norman and housing product chain Habitat announce they are in administration, and chocolate retailers Thorntons announced today they are shutting up to half of their 364 stores nationwide.

Many people thought that the worst of the financial troubles which hit our high street had finished a few years ago, with the high profile closures of stores like Borders, Woolworths and Zavvi.

However, there has been a trickle of high street stores that have since gone under too, such as fashion chains like Ethel Austin and Principles and recently DIY store Focus.

This new set of chains to announce financial struggles show that all is still not well within the UK economy, and that perhaps consumers are still choosing very carefully where to spend their income.

Most of the chains which have closed are blaming falling profits on the the consumer market. But why exactly are people cutting down on spending on the high street? Although there is high unemployment, many people are still in jobs with lots of disposable income.

One major factor could be the rising cost of living- food bills are rising month on month. Another factor are rising utilities bills- the cost of heating a house in winter leaves many people in debt.

Even the cost of train fares and petrol, which people need to get to the shops, are rising making it harder to even get to the high street.

Perhaps another reason for people not spending is a lack of credit availability- loans taken out for home improvements were very common a few years ago, but now banks are more cautious about where they lend their money.

This could explain why some of the companies- such as Habitat and Homeform- which owns the home improvement brands Moben, Kitchens Direct and Dolphin- have gone into administration.

This makes the future of the high street very shaky indeed.

When will consumers be able to get to the point where they will feel confident enough to spend, and the banks confident enough to lend?

With wages frozen, a threat of redundancy for many, and the expensive cost of living, the amount of disposable income people have to spend on comsumer goods is unsubstantial. Until people feel more confident in where they can put their earnings it is going to be hard for the high street to recover.

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About charisscottholm

I'm a recent graduate currently working in news production. Hope you find my blogs, features and comment pieces interesting and entertaining.

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