Iconic high street chain suddenly shuts down store after plans for expansion are paused with the Budget blamed
AN ICONIC high street chain suddenly shut down a store after pausing expansion plans, blaming the Budget for rising costs.
HMV is set to close its Whitefriars store in Canterbury on Monday, March 24, as part of a shift in the company’s retail strategy.
The popular music retailer has been in the city since 2022, but after just a short time in the shopping centre, it will be relocating for the second time in three years.
The Whitefriars location is one of the latest casualties in HMV’s plans, which were significantly impacted by the government’s recent budget.
HMV's bosses confirmed that due to rising wage costs announced in last autumn’s budget, the company had put its UK expansion plans on hold.
These changes, set to take effect in April, have pushed HMV to rethink its strategy for the foreseeable future.
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The Canterbury store had been filling a unit that was previously occupied by Monsoon and Accessorize.
Before this, HMV had moved out of the Marlowe Arcade earlier in 2022 after more than two decades in the two-storey building, reducing its footprint in the city from 6,000 square feet to 4,000 square feet.
The company has not yet announced where or when the replacement store will open, but they’ve assured customers to "stay tuned for updates on our new location and opening date."
In a recent statement, Managing Director Phil Halliday explained that HMV had initially hoped to open up to 10 new stores in the UK this year.
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However, these plans have been paused as the company grapples with rising costs.
Halliday emphasised that despite strong sales growth, including a 6.5% rise in sales to £189.6 million, the company was "peddling pretty hard" to maintain profits.
HMV’s financial struggles were also reflected in its accounts, where pre-tax profits fell by more than 6% to £4.9 million.
The higher costs, including wage increases due to the new National Insurance rise, have placed significant pressure on the company’s ability to grow within the UK.
Looking ahead, HMV plans to focus on opening stores in Ireland and Belgium instead of expanding within the UK.
The company is set to open a new store in Limerick, , this June and another in Antwerp, Belgium, later this year.
Online sales will also be expanded to Ireland and mainland Europe by the end of March.
It’s not just retailers that are struggling.
Kaspa’s Desserts in Basildon closed earlier this year due to issues with its landlord, and a Homebase in nearby Vange shut its doors last month.
The Nisa Local chain, which operates over 1,300 stores, is also feeling the pressure as the retail landscape changes.
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The cost-of-living crisis and inflation have made things worse, causing many shoppers to spend less.
As a result, stores that once enjoyed steady foot traffic are now closing their doors.
Why are retailers closing shops?
EMPTY shops have become an eyesore on many British high streets and are often symbolic of a town centre’s decline.
The Sun's business editor Ashley Armstrong explains why so many retailers are shutting their doors.
In many cases, retailers are shutting stores because they are no longer the money-makers they once were because of the rise of online shopping.
Falling store sales and rising staff costs have made it even more expensive for shops to stay open.
The British Retail Consortium has predicted that the Treasury's hike to employer NICs from April 2025, will cost the retail sector £2.3billion.
At the same time, the minimum wage will rise to £12.21 an hour from April, and the minimum wage for people aged 18-20 will rise to £10 an hour, an increase of £1.40.
In some cases, retailers are shutting a store and reopening a new shop at the other end of a high street to reflect how a town has changed.
The problem is that when a big shop closes, footfall falls across the local high street, which puts more shops at risk of closing.
Retail parks are increasingly popular with shoppers, who want to be able to get easy, free parking at a time when local councils have hiked parking charges in towns.
Many retailers including Next and Marks & Spencer have been shutting stores on the high street and taking bigger stores in better-performing retail parks instead.
In some cases, stores have been shut when a retailer goes bust, as in the case of Carpetright, Debenhams, Dorothy Perkins, Paperchase, Ted Baker, The Body Shop, Topshop and Wilko to name a few.
What's increasingly common is when a chain goes bust a rival retailer or private equity firm snaps up the intellectual property rights so they can own the brand and sell it online.
They may go on to open a handful of stores if there is customer demand, but there are rarely ever as many stores or in the same places.
The Centre for Retail Research (CRR) has warned that around 17,350 retail sites are expected to shut down this year.
