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Retail Therapy: Why The Retail Industry Is Broken – And What Can Be Done To Fix It

Retail Therapy: Why The Retail Industry Is Broken – And What Can Be Done To Fix It

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Retail Therapy: Why The Retail Industry Is Broken – And What Can Be Done To Fix It

429 Seiten
5 Stunden
Jan 10, 2019


Almost weekly, the news is full of stories about disappearing retail chains. From House of Fraser and BHS to Toys'R'Us and Sears, recognised names are vanishing overnight – as such large organizations disappear, so the malls, shopping centres, high streets and main streets become emptier and less appealing to visit.

The retail sector is hugely important in terms of job numbers: in the US, it employs around 30 million people (directly and indirectly); in the UK, around 10 million. As such, anything that jeopardises the retail sector will have a deep and lasting impact on millions of lives, as well as on public policy. While many blame the 'Amazon effect', this is an oversimplification. Deeper forces are at work that are changing people's relationships with brands, the balance of power between producers and consumers, and the whole nature of the supply chain that has existed since the industrial revolution.

Retail Therapy offers a comprehensive analysis of these forces and their impact on the world of retailing. More importantly, it presents a cogent analysis of the longer term trends that are shaping retailing, and outlines a clear road map for sustainable success in the future.
Jan 10, 2019

Über den Autor

Mark Pilkington is an experienced retailer and consultant, now based in the UK. After graduating from INSEAD, he joined Courtaulds, eventually becoming CEO of Gossard. While there, he coordinated the initial launch of the Wonderbra, with the associated media storm across Europe and North America. He has worked subsequently on joint ventures with M&S (, and has consulted extensively in the Middle East in the lingerie and cosmetics areas. His current role is in consultancy for major retail groups on strategic developments in a rapidly-changing sector, with clients in Europe, the US, the Middle East and Asia.

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Retail Therapy - Mark Pilkington

Retail Therapy

Retail Therapy

Why the retail industry is broken – and what can be done to fix it

Mark Pilkington


Introduction – an overview of the crisis

PART ONE Retail Apocalypse Now!

1 A tale of two bankruptcies

2 The great stores meltdown

3 No longer a nation of shopkeepers

4 Dark Satanic Malls

5 My kingdom for a horse – the knock-on effect on branded suppliers

6 The next big short?

7 Killing more jobs than China

8 A global problem

9 The impact of public policy

PART TWO The Causes of the Crisis in Retailing

10 The classical retailing model

11 The rise of e-commerce

12 The broader impact of the technological revolution

13 The generational revolution

14 The death of brands

15 Passing peak consumption

16 Conquering the final mile

17 The dawn of a virtual world

18 This is your fridge talking

19 Algorithm’n’blues

20 Veni, Vidi, 3D

21 See you later, incubator

22 Direct is best

23 Retail derailed

24 Bankers away!

25 Can the last one out switch off the lights?

PART THREE How to Save Retail

26 The importance of simplicity

27 Go with the flow

28 Cannibalize, cannibalize, cannibalize!

29 Lean and mean

30 Brand Theatre

31 The Third Space

32 Re-tech

33 Becoming the conversation

34 The price is right

35 Inclusive is the new exclusive

36 Virtuous reality

37 The hacker way

38 Reinventing shared shopping spaces

39 Advice to governments

40 Summary – the new rules for survival



Introduction – an overview of the crisis

The world of retailing, as we know it, is going under.

Since I started writing this book, in late 2016, this crisis has gone from being a cloud on the horizon, mainly in the United States, to being a fully-fledged hurricane, which is sweeping away large sections of the industry across the globe. And the arrival of the Coronavirus in 2020 only served to make things worse, as stores and restaurants were shut down for prolonged periods.

In the UK, many retailers have gone under, and hundreds more are struggling. Among the insolvencies are high-profile casualties such as Debenhams, Arcadia, House of Fraser, Mothercare, ToysRUs, BHS, Carpetright, Maplin, Jacques Vert, East, Jaeger, Jack Wills, Select, LK Bennett, Oddbins, Thomas Cook, Karen Millen, Coast, Links of London, Bonmarché, Regis, Mamas and Papas, Poundworld, Austin Reed and HMV.¹ In the United States, the situation is even worse, with over 300 retailers going into Chapter 11 or closing all their stores, in recent years, including major names like Sears, Kmart, ToysRUs, Forever 21, Destination Maternity, Diesel, Roberto Cavalli, Barneys NY, Henri Bendel, Sports Authority, Claire’s, Quiksilver, Aeropostale, Gymboree, Payless ShoeSource, BCBG, Wet Seal and The Limited.²

In the United States, over 9,000 store closures were announced in 2019 – the most ever.³ To give some perspective to these numbers, 2008, which was at the height of the Great Recession, only saw 6,000 closures. In the UK, nearly 3,000 stores closed down in the first half of 2019 alone. And these closures have not been limited to weak brands, as in the past; some of the brands affected include some of the most powerful in world, such as Polo Ralph Lauren⁴ , Victoria’s Secret⁵ and Marks & Spencer.⁶

The problem is affecting all sectors, from fashion to banking, and at all price levels, from luxury through to discount. A number of premium brands and luxury houses have seen periods of flat or declining sales, particularly in the North American market, including Prada, Tommy Hilfiger, Coach, Armani, Burberry, Ferragamo, Michael Kors, Tiffany, Ralph Lauren, Diesel, Tod’s, Canali, Lanvin, Mulberry and Roberto Cavalli.⁷ At the other end of the spectrum, discounters – which have enjoyed many years of uninterrupted growth – have also faced a slowdown in sales growth. And in the middle market, brands like J Crew, Mothercare and Gap have all come under increasing pressure.⁸ Overall, about 90 per cent of US retailers have experienced sales declines.

But nothing is as frightening as what is happening to the department stores. Companies like Debenhams and House of Fraser in the UK, and Sears, JC Penney and Macy’s in the United States, have seen their businesses badly affected in the last few years. They are closing thousands of stores between them, and there is a real question mark as to whether the organizations themselves will survive.⁹ Warren Buffet, the famous investor, appeared to make this official when, in early 2017, he said: ‘I think that retailing is just too tough for me; just generally’, and ‘The department store is online now’.¹⁰

It is not just the retailers who are suffering. As their businesses decline, the brand suppliers who depend on them are also experiencing significant problems. Highly successful companies like Kraft Heinz, Under Armour and Mattel have seen declining sales as their retail customers cut back, especially in the US markets.¹¹

Where did it all go wrong?

All round the world, there are signs of a retail sector in crisis, and the problem is not limited to the UK and the United States. Retailers are struggling and going bankrupt across Europe, Russia, South America, the Middle East and the Far East.

And unlike in 2008, it is not the economy that is causing the problem. It is true that 2008 was a very difficult time for retailers, but it was also understandable – it was in the middle of the worst economic downturn since the Second World War. The current storm, on the other hand, has blown up out of the clear skies of a growth economy that has been enhanced by low unemployment and booming stock markets. Of course, the impact of Coronavirus will almost certainly lead to a reversal of these benign conditions, and worsen the already difficult situation for retailers.

What on earth is going on? Well, it appears that the slow death of retail, which has been predicted and discussed for so long, is finally happening.

People often say, ‘But is this really new? After all, retail seems to have been struggling for a long time.’ Well, yes, individual retailers have struggled; but this is different – this has the potential to affect almost everyone.

Because retailing is a high fixed-cost business, with heavy investments in store construction, long rental leases and significant stocks of goods, it only takes a few years of sales decline before the whole thing tips over like the Titanic filling with water.

Why retail is so important?

Why should you care? Well, you may be a shopper, concerned about the disappearance of your favourite brands from your local shopping district or mall. You may be someone who works in retailing, or in one of the suppliers who depend on the retail sector. Or you may be an investor, worried about what all this means for the future of the economy.


Whoever you are, the truth is that retailing affects all of us. Shops, and the suppliers that they support, are one of the biggest parts of the global economy. Retailing globally had estimated sales of US$26 trillion in 2019, and represents 31 per cent of global GDP, employing literally billions of people.¹² In the UK alone, it employs 3.5 million people directly and it is estimated that another 3.5 million people depend on it as suppliers and other counterparties.¹³

In the United States it employs fifteen million people directly and another fifteen million jobs depend on it, whe n one includes suppliers.¹⁴ This is far bigger than, for example, manufacturing or mining, despite them attracting more political attention. Retailing and its suppliers employ fully 25 per cent of the working population, so what affects retailing will ultimately affect the entire economy. As retail declines, it will cause a major rise in unemployment. For example, over 85,000 retail workers were made redundant in the UK in 2019, and the American department stores alone laid off more than 100,000 people in 2017, which is more than all the coal miners and steel workers in the whole of the country.¹⁵ And the retail decline is only just beginning to gather speed. In the next few years, that momentum will increase and it will begin to threaten the whole economy.

If you look at the types of jobs that retail provides, these are often a godsend for the more vulnerable groups in society. It is almost the only type of job that does not require much in the way of qualifications, and retail employment is disproportionately weighted towards women, ethnic minorities and school leavers. These jobs provide work and incomes to people in every community, large and small, across the world. With manufacturing in decline, it has become almost the only type of job that is available in poorer areas, and those retail-related salaries are often the only things supporting fragile families.

Property and real estate

Retailing also plays a major part in the property market. As retailing declines, the malls and shopping streets are also being hit. All across the United States, for example, malls are starting to fall apart, especially in poorer communities. It is estimated that over 400 malls (out of a total of 1,200) will have to close in the next few years.¹⁶

Even prime shopping areas like the so-called ‘Golden Triangle’ in Manhattan’s Upper East Side, or selected streets in London’s West End, are starting to experience serious levels of vacancies for the first time ever. In total, over US$2 trillion of assets are invested in retail in the United States alone, and, in every market, retail makes up a significant proportion of the financial markets.¹⁷ A retail collapse threatens to deflate these assets in an extreme manner, and it is not too much to say that it could be a prime cause of the next global economic crisis.

What lies ahead?

What are governments doing about the crisis? Are they helping to support this industry which gives sustenance to so many communities across the world? Far from it – in fact, in some ways, they seem bent on hastening its decline.

Whether it be the impact of Brexit, the national living wage, the high business rates and the apprenticeship levy in the UK, or the restrictions on immigration, the import tariffs and the fact that many internet companies have been permitted to avoid state sales tax in the United States, governments seem almost to be working against the retail industry, in complete ignorance of its vital role in society. In fact, retail gets very little attention, politically speaking: retail workers are not strongly unionized and they lack the photo-opportunity appeal of hard-hatted white male miners and steel workers.

So what can we do to stop the retail collapse, and the economic crisis that it is precipitating? Fortunately, solutions do exist. There are things that governments, brands and retailers can do to avoid the worst of the crisis. Unfortunately, there seems to be a lack of understanding of the underlying problems – many retailers around the world are burying their heads in the sand, and national governments seem to be almost unaware of the problem at all.

The biggest issue is that even so-called retail industry experts are failing to really understand the problem. The causes of the retail apocalypse are multiple and complex. People blame it on e-commerce, and it is true that this is a key factor in the story. Yet there are many other causes, including the information revolution, generational changes, the role of private equity (PE) in increasing retail debt levels, and self-inflicted wounds from the retailers themselves. Because they misunderstand these causes, many commentators have sought to represent what is happening as a kind of evolution, rather than seeing it for the revolution that it is. I would urge the reader to beware of this point of view. The fact is that retailers have had around twenty years to come to terms with the threat of e-commerce, and yet the industry has not reacted fast enough, and I believe that this indicates a complacency, which has been, and continues to be, very dangerous.

Until the depth of the crisis is appreciated, and its causes fully understood, there is little chance that either the retailers, the brands that supply them, or the governments who are charged with looking after the health of our economies will be able to prevent the looming crisis that threatens us all.

Using this book

This is what this book will try to address. It will take a long hard look at the crisis and its causes, and will then attempt to outline and discuss some meaningful and practical solutions.

Part One takes a closer look at the nature of the retail crisis – read this part in particular if you want much more information about the underlying problems themselves. If it has not reached your part of the world yet, rest assured that it will. My recommendation would be to try to stay ahead of the curve by understanding how and why these events have had such an impact on established markets in the West.

Part Two looks into the causes of the problem, and the trends that are likely to make things even worse. This is important if you want to look behind the headlines and have a deeper understand of how current developments are likely to affect the retail sector in the near future.

Part Three looks at what can be done to save retailing as we know it. Given the issues that we’ve already discussed, this topic lies at the very heart of the book. Despite the doom and gloom, there are ways in which retailers can fight back and attract customers back into both their physical and online stores.

Now please read on … .


Retail Apocalypse Now!


A tale of two bankruptcies

ToysRUs – A leader in the UK/US toy market

On 28 February 2018, ToysRUs UK went into administration, following the move by its US parent which filed under Chapter 11 in September 2017. With these decisions, 900 stores were scheduled for closure, and as many as 40,000 employees were to lose their jobs. The store group which had been so integral to the lives of several generations of children would open its doors no longer. The shares of major toy suppliers like Mattel and Hasbro dropped sharply. It was a depressing end for a once-proud company, its employees and suppliers.

ToysRUs had been in operation for seventy years since it was founded by Charles Lazarus in 1948. Its big-box, out-of-town stores were a success, making it the largest toy retailer in the world by the 1990s. Problems started to appear in 2005, after the company was acquired by a consortium of venture capitalists, including Bain Capital Partners, KKR & Co and Vornado Realty Trust, in a US$6.6 billion leveraged buy out. According to multiple sources, including Bloomberg, The Washington Post, Reuters and Fortune, the new owners proceeded to do what a lot of venture capitalists do, and loaded the ToysRUs balance sheet with a massive US$5.2 billion of debt, which alone required US$400 million of interest payments every year. At the same time, they took out US$470 million in advisory fees, interest and other payments.

On top of this financial burden, the growth of internet companies like Amazon began to take large amounts of business away from ToysRUs, and the company struggled to build its own e-commerce business. Sales declined, and the company fell into losses from 2014 onwards; great efforts were made to turn it around, but in the end such activity was simply delaying the inevitable. Despite its US$11 billion of sales and its 15 per cent share of the US toy market, ToysRUs met its end in 2018.

The effect of the ToysRUs debacle on workers, communities and suppliers – in both the United States and the UK – was immediate and severe. The 33,000 US employees received limited severance payments (other than for the minimum sixty-day notice period), despite executives receiving US$8 million in bonuses a week before filing for bankruptcy. Wayne, New Jersey, where the company was headquartered, also suffered, as the toy firm was the region’s third largest taxpayer. And suppliers were left with heavy unpaid bills. ‘We have a US$14–$15 million payment due that hasn’t been paid,’ Isaac Larian, chief executive of Bratz dolls maker MGA Entertainment, said. ‘If I was a guessing man, I wouldn’t think I’d get all of it back.’ The closure has caused panic among smaller toy suppliers, many of whom are now at risk themselves.¹

British Home Stores – A major British department store

On Monday 25 April 2016, British Home Stores (more commonly referred to as BHS) called in the receivers, ending eighty-eight years as a leading UK department store. Founded in 1928, by a group of American entrepreneurs who sought to emulate the success of Woolworths by selling everything for a shilling or less, BHS was a mainstay of the British High Street for decades, with nearly 200 department stores at its height. In the late 1980s and 1990s, it began to lose ground to retail rivals, but its real fate was sealed when, in 2000, it was bought by controversial business magnate, Philip Green, for £200 million.

According to many credible sources, including a Parliamentary Select Committee report, Green’s family and other shareholders then proceeded to take over £586 million out of the business – in dividends, rent and interest – and allowed a £225 million deficit to open up in the company’s pension scheme. By 2015, the company had been wrung dry, and Green, under pressure from the UK Pensions Regulator to top up the pensions scheme, opted instead to sell BHS on to Dominic Chappell – a bankrupt ex-racing driver, with no experience of retailing – for the princely sum of £1. Chappell and his company, Retail Acquisitions, then took a large amount of money out of the company in the form of loans, fees, salaries, interest and dividends, before BHS finally gave up the ghost a year later. Not only did 11,000 employees lose their jobs, but 20,000 BHS pensioners saw their pensions threatened, and thousands of suppliers were left with £1.3 billion of unpaid bills. ‘No one is to blame’, said Dominic Chappell. Philip Green denied all responsibility, saying: ‘If you buy my house and it falls down, is it my fault?’ The Parliamentary Committee report concluded that the ‘systematic plunder’ of BHS represented the ‘unacceptable face of capitalism’.

By the time of the bankruptcy, the potential pension deficit had swollen to £571 million. It should be noted that Philip Green has, under extreme political and media pressure, now agreed to pay back £373 million to the Pensions Regulator.²


These two tragic stores illustrate a number of the themes that will dominate this book: the rise of e-commerce, the failure of retail management, the role of private financiers, the wrecked careers of the employees and the communities who are left to pick up the tab at the end.

You might say: ‘Well, it’s certainly tragic, but isn’t this just capitalism at work? Surely this is normal.’

Unfortunately, what we are witnessing is not ‘normal’. It is not just individual retailers who are suffering – many industry commentators believe that we are witnessing the death throes of an entire industry.


The great stores meltdown

ToysRUs and British Home Stores are but two examples of a phenomenon which is spreading rapidly across the UK, the United States and the rest of the world. A substantial portion of the retail industry suddenly seems to be going under all at once. Every day brings news of fresh bankruptcies, store closures and shuttered malls. The retail industry, which appeared to survive the Great Recession of 2008, seems to be suddenly sinking despite the apparently benign global economy. And now, in 2020, the Coronavirus crisis has threatened to make everything much worse.

Closing down

Retailing in the UK is under severe pressure, with recent retail sales volumes showing their weakest growth for more than five years.¹

In addition, Brexit has led to a fall in the value of the pound against the dollar, which has pushed up retail product sourcing costs by around 20 per cent.² Labour costs, rents and business rates have also been rising sharply, creating a perfect storm for UK retailers. And the damage has been immediate and obvious – the high street has been emptying out before our very eyes, with a shocking litany of insolvencies, including Debenhams, House of Fraser, ToysRUs, Mothercare, BHS, Carpetright, Maplin, Jacques Vert, Jaeger, Austin Reed, HMV, Joe Bloggs, East, Multiyork, Agent Provocateur, Brantano, Blue Inc, New Look and Select.³

Nearly 2,000 more stores closed than opened in 2017, far more than ever before!

The situation in the United States is very bad, with thousands of store closures announced. Over 8,000 stores closed in the United States in 2017 alone. This is significantly worse than in the Great Recession of 2008, but unlike in 2008 it is not the economy which is causing the problem – the US economy has been growing at a reasonable rate of 2–3 per cent in recent years. Unemployment was less than 5 per cent in 2018, and was falling. The stock market was at near-record levels in the same year, and normally retail brands should have been thriving.

Yet despite these positive conditions, over 300 US retailers went out of business or became insolvent in the first half of 2017 alone.⁵ It is true that some of these were relatively small operations, but the casualty list contains a surprising number of major household names, especially in the fashion and apparel sectors.

Apart from ToysRUs, these brands include the following major names: Sears, Kmart, Sports Authority, Claire’s, Quiksilver, Aeropostale, Bebe, Gymboree, Payless ShoeSource, BCBG Max Azria, Wet Seal, The Limited, Nine West, Charming Charlie, True Religion, Fredericks of Hollywood, American Apparel, Pacific Sunwear, Radio Shack, Eastern Outfitters, Brookstone, Coldwater Creek, ALCO Stores, Bon-Ton Stores, HH Gregg, A&P, Gordmans Stores Inc., Gander Mountain, Alfred Angelo bridal, Hancock Fabrics, Family Christian, Rue 21, Joyce Leslie, Tamara Mellon, Deb Stores, Karmaloop, Cache, Yogasmoga, Papaya Clothing, Perfumania, Aerosoles, Styles for Less, Southeastern Grocers (Owner of Winn-Dixie), Tops Markets, Charlotte Olympia and Rockport.

In addition, a large number of retailers have had their credit ratings downgraded by ratings agencies such as Fitch, Moody’s and S&P, including Neiman Marcus, J Crew, Tom’s Shoes, Charlotte Russe, NYDJ Apparel, Vince, David’s Bridal, Men’s Wearhouse, Boot Barn, Calceus Acquisition (owners of Cole Haan), Christopher & Banks, 99 Cents Only Stores, Bluestem Brands, Everest Holdings (owner of Eddie Bauer), FULLBEAUTY Brands, Academy Sports & Outdoors, PetSmart, SSH Holdings (owner of Spencer’s and Spirit), Evergreen AcqCo (owner of Value Village and Savers thift stores), HT Intermediate Holdings (owners of Hot Topic), The Fresh Market, Guitar Center, Bluestem Brands (owners of Fingerhut, Old Pueblo Traders and Appleseed's), Fairway Group grocery, SHO Holding (owners of Shoes For Crews), Things Remembered (gifts) and Indra Holdings (owner of Totes Isotoner).⁷ Being downgraded indicates a higher risk of bankruptcy. So bad is the problem that nearly a fifth of the US retailers covered by the ratings agencies have poor debt ratings. In the UK, 19 per cent of retailers – or over 6,500 companies – are showing signs of insolvency, and many more are in distress.⁸

Some major brands, which even a few years ago would have been considered untouchable, have not been spared. The following brands have seen sustained periods of same-store sales decline and/or substantial store closures in the US over the past few years – Victoria’s Secret, Polo Ralph Lauren, Express, Michael Kors, Abercrombie and Fitch, J Crew, Banana Republic, Guess, Foot Locker and Dick’s Sporting Goods.⁹ These are top brands, rather than weak players, so the fact that they have experienced issues is very shocking.

In the UK, major companies like Marks & Spencer, Debenhams, John Lewis, Top Shop, Next, Clarks, The Body Shop, Laura Ashley, Early Learning Centre, Halfords and Sports Direct have seen either declining same-store sales, drops in profits or substantial store closures.¹⁰

Sectors outside of fashion and clothing have also been affected. For example, in the pharmacy sector, companies like Walgreens, CVS, GNC and Vitamin Shoppe have been suffering from declining jobs ¹¹ , and in the UK, Boots and Lloyds Pharmacy have been cutting stores or jobs.¹² Furniture retailing has been hard hit, with companies like Pottery Barn in the United States, and B&Q, Homebase and DFS in the UK seeing sales drops. The problems facing the sector was given a poignant symbol in May 2018, when Homebase was sold by its Australian parent, Bunnings, for just £1.00.¹³

In the office supplies business, Office Depot and Staples have been badly affected.¹⁴ The grocery retail business has historically stood up quite well against the internet, but there are signs that it too is now feeling the pressure, as leading supermarket chains like Kroger and Albertsons in the United States, and Sainsbury’s and Asda in the UK have begun to experience problems.¹⁵

Department store woes

But if there is one class of stores that is right out on its own in terms of the scale of the meltdown, it is department stores. This category has been declining for a long time, but now it feels like the sector is approaching the end of the road. In the United States, over 1,700 store closures have been announced by groups such as Macy’s, Sears, JC Penney and Kohl’s.¹⁶ In the UK, companies like House of Fraser and Debenhams have seen major drops in same-store sales and/or profits, and insolvency.¹⁷

Such is the scale of the meltdown that analysts are questioning whether the large department store groups will survive at all. Perhaps the most shocking case is that of Sears, which went into Chapter 11 in October 2018, having already reduced its number of stores from 3,555 in 2010 to 1,002 in 2017, on the back of massive drops in same-store sales. Sears Holdings’ remaining 800 or so stores and 89,000 employees were placed at risk by its insolvency. Sears Canada had already filed for bankruptcy in 2017, with the closure of 59 stores and the loss of 12,000 jobs.¹⁸

The disappearing restaurant

It is not just retail shops which are getting hit; other categories of retailing are also coming under extreme pressure. As retail stores close down, it has a knock-on effect on the number of people eating in the nearby restaurants, and the restaurant sector has seen a serious decline in many areas. For example, in the United States, the casual dining sector has seen a sustained drop in sales in 2016 and 2017. Like retail, the sector had over-expanded in recent years, and it is now widely seen as ‘over-restauranted’.

There is also a growing trend towards people ordering food from alternative sources, such as meal kits, food trucks and of course home delivery. Meal kits are estimated to generate US$1.5 billion of sales, food trucks US$1.2 billion and home delivery US$22 billion. The total sales of the US restaurant industry were US$799 billion in 2017, so this represents only 3 per cent of the total, but the trend is strongly upwards, with an anticipated 19 per cent annual growth in home deliveries, leading to an estimated market of US$45 billion by 2022.¹⁹

In the UK there were over 1,000 restaurant closures in 2017, with the Handmade Burger Company, Jamie’s Italian, Prezzo, Square Pie, Byron, Barbacoa and Viva Brazil Steakhouse all falling into insolvency, and Carluccio’s, Strada, EAT, Bella Italia, Café Rouge, Pizza Express and Chimichanga experiencing declining sales, profits or branch closures. The number of restaurants declaring bankruptcy rose by 13 per cent in 2017, and up to 20 per cent of UK restaurants (or 15,000 outlets) could close in the next few years.²⁰ Even Starbucks has seen declining sales in the UK.²¹

In the United States, the problems faced by the suburban middle class has been reflected in a catastrophic decline in the fortunes of many casual dining brands which have formed the backbone of Middle America for the past twenty years. A number of chains have gone bankrupt, including Logan’s Roadhouse, Champps, Bailey’s Sports Grille, Garden Fresh Restaurant and Sweet Tomatoes. Many others are closing or selling their stores.²²

Starbucks has announced the closure of all 379 of its Teavana stores (acquired in 2012 for US$675 million), and also issued a cautious forward forecast. CEO, Howard Schultz said: ‘We can’t hide

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