The fates of Arcadia and Debenhams point to retail’s huge problem

UNABLE TO COMPETE with the convenience of shopping online, the high street has been crumbling for years; and the covid-19 pandemic has accelerated the trend. Arcadia, a retailing conglomerate, announced that it would enter administration on November 30th. The next day Debenhams, a 207-year-old department store chain, which has been in administration since April, said it would start winding down its business. Some 25,000 jobs are at risk across the two companies. The real estate they occupy, some 15.5m square feet according to the Local Data Company, a research firm, risks falling fallow.

The retailing business employs 3m people and occupies vast swathes of property. The proportion of shopping done online has increased from 20% before the pandemic to 27% today, according to data compiled by the Royal Society for Arts. Whereas jobs in hospitality and leisure are likely to return as the virus subsides, the changes in retail are “a longer-term adjustment and the jobs won’t bounce back”, reckons Hannah Slaughter of the Resolution Foundation, a think-tank.

The full effects of the covid shock to retail are likely to arrive next summer. By then the government’s job-retention scheme, and its holiday on business rates, a commercial-property tax paid to local authorities, will have run out. The truth will be writ in retailers’...