The retail industry is vital to the UK economy - in 2017 it generated £395billion worth of retail sales and in 2018 the sector housed 319,000 retail businesses. The number of people employed in retail in 2017 reached 2.9 million. The growth in retail sales in 2017 was 4.3%. The amount retail generates of total GDP (GVA) is 5%.
Retail encompasses shops, department stores, supermarkets, market stalls, door-to-door sales people and internet retailers.
The four biggest retailers in the UK are Tesco, Sainsbury's, Walmart (Asda) and Morrisons meaning that the industry is dominated by supermarkets, closely followed by internet retailer Amazon and department stores such as John Lewis and Marks & Spencer.
Issues such as internet retailing, changing customer behaviour and store closures are currently affecting the retail sector.
According to the House of Commons Briefing Paper, Retail sector in the UK released October 2018, 28 retail companies with multiple stores have ceased trading in the year to August 2018, affecting 39,000 jobs.
With social media and smartphones feeding the demand for instant gratification the retail industry has seen a shift in shopping trends. Rather than spending their money in bricks and mortar shops consumers are now shopping online with 'clicks'.
Fashion retail sales have also experienced a dip due to consumers changing spending habits. Rather than spending their money on clothes and shoes people are now spending their cash on leisure activities such as eating out and going on holiday.
Employers are also set to feel the financial pinch thanks to the 4.9% increase in the National Living Wage (NLW) from April 1 2019. The NLW will increase to £8.21 from £7.83. Every retail worker aged 25 or over will now earn a minimum of £8.21 an hour. This recent rise has also put employers under pressure to lift salaries company-wide, instead of just for those who are low paid. Retailers now have to figure out how to meet the extra costs of the higher wage bill. This could mean increasing their product prices or cutting costs from other areas of the business.