High-Street in the Economic Recession

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High street is the metonym of primary business in the town or city, especially in the United Kingdom. High street has best perception and fastest reaction to the local economy. Currently, Britain still not completely survive from the dreadful economy, in this situation, high-streets are facing problems. This essay aims to describe current economic issues that the high-street retail sector is facing and to explain the issues by giving some examples.

The first pressure that the high-street retail faces is recession of UK economy. Start from the end of 2008, this recession is said to be the “worst recession” in UK since 1945.The first aspect of recession influences retail is that it brings closure to the high-street retailers. As Wood (2010) described that “Recession has sorted the wheat from the chaff in the retail sector”. As research firm Experian said that high street shops close at up to 100 every day due to business struggle at recession period. Recession reduces high-street retails’ sales. In the year 2009, retailers’ sales fell 0.6 per cent in May after holding up well in April (Wallop, 2009). Based on research from National Statistics, compared with the same season in 2008, the seasonally adjusted value of retail sales in May in 2009 fell by 1.1 per cent together with seasonally adjusted volume fell by 1.6 per cent (See figure 1).

Figure1: The seasonally adjusted value and volume of retail sales in May 2008 and 2009.

Source: National Statistics
Verdict analysts estimate that retailers’ sales lose £7.4 billion over past two years with one shop close in seven. For instance, Sainsbury’s, one of the big supermarket chains in the UK faced a lowest growth in 2010 since 2005 and Co-operative Group which is Britain’s fifth-biggest grocer mentioned in March that “its underlying sales were nearly flat” (Finch J. 2010).

In terms of demand, Drucker indicated in 1954 that “there is only one valid definition of business purpose: to create a...
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