Expert comment: The implications of Wilko's closure on UK retail dynamics

Categories: Salford Business School

University of Salford Business School's Dr Gordon Fletcher, Retail Expert and Associate Dean of Research and Innovation, shares his thoughts on the implications of Wilko's closure on UK retail dynamics. 

The failure to secure a bailout deal for the remaining Wilko stores once again repeats the story of a tightly squeezed middle in UK High Street retail. 

While competitor B&M swooped last to secure key Wilko locations and effectively expanded by about 7%, the remaining stores are now on course to be entirely shuttered. This will leave vacant properties in towns and cities across the UK, only increasing the sense of our collective abandonment of the high street. 

The cost of living and online purchasing makes it difficult for these traditional middle-ground retailers to keep pace. Burdened by complex supply chains and high street rental costs, it is difficult to compete against their more agile competitors, large retail park offerings, and those businesses based solely on low-cost offerings. 

While high street clothing has regularly been saved through the intervention of Sports Direct and Frasers Group, there has been no similar safety net for general variety goods retailers. Woolworths and BHS both reflect similar failures in the middle ground of variety retailing when both price-conscious and experientially motivated buyers shift their loyalties. The 2018 failure of Poundworld also hints that a race to the bottom based on aggressive price discounting has inherent long-term risks when discounting food retailers offer an infrequently purchased variety of items in their middle aisle. 

The failure to secure a reprieve for Wilko is the final confirmation that the presence of chain variety stores on the High Street is finally over. 

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