The UK apparel retail sector has faced a week of destruction and disruption after far-right extremists used social media to mobilise and start riots across the country.
On 7 August many retailers made the decision to close after a warning from the police that far-right organisations had planned more than 100 rallies across the country. However, large groups of anti-racism counter-protesters gathered, outnumbering the far-right in many cases.
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Despite this, many businesses remain concerned about the possibility of further disruption.
With outbreaks of violence and looting reported in Belfast, Plymouth, Liverpool and Birmingham in recent days, and nearly 400 arrests made, the apparel retail industry finds itself grappling with significant challenges.
Immediate impact of extremist riots on apparel retailers
The riots were triggered by the tragic fatal stabbings of three girls attending a dance class in Southport, Merseyside. Misinformation quickly spread on social media about the perpetrator’s identity and gave far-right extremists an excuse to take to the streets.
The full extent of the impact on the UK apparel retail sector is not yet known, however, Just Style understands a few large retailers have been affected and have closed stores on an ad-hoc basis depending on the local situation and information available.
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By GlobalDataRetailers are expected to continue to close stores on a case-by-case and area-by-area basis to ensure colleagues and customers are kept safe.
The British Retail Consortium’s chief executive Helen Dickinson tells Just Style: “Many retail workers have been heading to work fearing their stores and their safety could be compromised by the looting and vandalism that has taken grip in various parts of the country.
“Some are already seeing the impact, as they spend their day cleaning up the damage caused by these selfish and criminal acts. Teams of retail colleagues across the industry work tirelessly, side by side to serve customers day in and day out, performing a vital role across all local communities. This is only possible if colleagues and customers can safely visit their local stores.”
GlobalData retail analyst Neil Saunders agrees that it is challenging for apparel retailers to deal with a “big social crisis,” as questions arise on whether to start early or not open to avoid putting staff and customers in danger during such events.
“Obviously, investing in things like metal shutters and security systems can help – but this all incurs additional expense,” he adds.
He also points out that retailers rely heavily on strong footfall to drive revenue so “anything that interrupts this is unhelpful,” and if these riots put people off visiting towns and city centres, he believes it could have a damaging impact on short-term sales.
Following the widespread chaos, the BRC is offering support to its members and facilitated a meeting on 7 August to discuss the situation thus far and share best practice to enhance safety measures.
How will the riots impact consumer spending?
The impact of the riots on consumer confidence and spending patterns is a major concern for the apparel industry.
GlobalData senior apparel analyst Pippa Stephens believes the riots will “undoubtedly be having an impact on consumers’ spending,” particularly in the areas where they are taking place. She says it’s likely shoppers will avoid high streets to remain safe.
While retailers typically have insurance to cover property and stock damage, they are unlikely to be compensated for lost sales, she adds.
Stephens does hope however that these will only be short-term issues for apparel retailers with consumer confidence expected to return once the unrest has settled.
What are the possible long-term implications of the Southport riots?
For Saunders, the longer-term impact depends on whether the riots persist. “If it continues for too long, then it may change people’s habits in terms of where they shop,” he says.
However, he is keen to point out that consumer spending tends to be more responsive to changes in personal financial circumstances than to wider social issues.
Shore Capital’s vice chairman Clive Black tells Just Style that, in contrast to global instability, the UK’s recent general election outcome made it appear a “much more stable country, in absolute and relative terms.” However, he adds the recent disorder has now “challenged that narrative”.
He suggests that if the authorities can extinguish the recent unrest quickly it is likely to be seen as an “unpalatable storm in a teacup,” however, should this not be the case prolonged unrest could damage the UK’s reputation, potentially impacting investment.
He states that it is frankly essential that control is gained sooner rather than later and explains there is an economic imperative for the government and police to show they can control matters.”
Black remains cautiously optimistic about the consumer economy, citing rising UK real living standards, stabilised consumer confidence and a recent cut in base rates. However, he stresses the need for effective action against ongoing issues such as shoplifting and violence against retail workers.
BRC’s Dickinson agrees and adds that the “full force of the law,” should be brought on those individuals who are “committing criminal damage and theft against retailers and the communities they are part of.”
What apparel retailers need from the government in times of unrest
UK prime minister Keir Starmer has pledged to “take all necessary action” to end the riots, emphasising the need to treat the situation as a violent disorder rather than a protest.
Dickinson had previously welcomed Labour’s pledge in its manifesto to create a new specific offence for assaulting a retail worker to protect colleagues from both threat and violence.
In April, former UK prime minister Rishi Sunak announced plans to make assaulting a retail worker a standalone criminal offence in England and Wales, mirroring existing laws in Scotland. This announcement came in response to intense lobbying from UK retailers who have faced a surge in retail crime in recent years.
According to the BRC, incidents of violence and abuse against retail staff increased from around 870 per day in the 12 months before August 2022, to over 1,300 per day in the 12 months to August 2023. During the same period, the cost of retail theft doubled to £1.8bn ($2.2bn), with over 45,000 incidents per day.
Sunak said he was “sending a message to those criminals — whether they are serious organised criminal gangs, repeat offenders or opportunistic thieves — who think they can get away with stealing from these local businesses or abusing shop workers, enough is enough”.
But it seems the apparel retail industry is looking to the government for more than just words.
Black notes that while new legislative activity is welcome, “it is action, not words, that is needed on the ground to make working in clothing shops more comfortable, whilst encouraging shoppers to feel safe and sound when they are out.”
He highlights the epidemic of shoplifting that needs to be more “effectively addressed” alongside the “wholly unacceptable levels of violence and intimidation against shop workers.”
Saunders points out that there is typically no real government assistance provided to affected retailers. He suggests that, in fairness, businesses forced to close due to disruption should receive a refund on some of their business rates, though he acknowledges that local authorities are unlikely to enact such measures due to cost implications.
