Imitation clothing cost UK retailers 3.6 billion per year

17 September 2015 Consultancy.uk

The UK clothing industry loses more than €3.6 billion per year due to counterfeit clothing being sold in its market. An analysis by Consultancy.uk, based on data from the Office for Harmonization in the Internal Market (OHIM), shows that imitation clothing across the European Union negatively affects the market by as much as €26 billion. Italy and Spain see the biggest loss of legitimate revenue, with retailers missing out on more than €4 billion per year.

The Office for Harmonization in the Internal Market (OHIM), the European agency responsible for the registration of trademarks and design IP, recently performed research into how much damage retailers in the clothing industry lose annually due to imitation or fake clothing. An analysis of the data reveals that the damage across the whole European Union is more than €26 billion – about 9.7% of the total European market turnover. The damage is caused predominantly by people choosing to purchase cheaper imitations than the expensive originals, in most cases consumer are aware of the phoney status of their products.

Cost of imitation clothing for retail industry

€3.6 billion
Per year the UK clothing industry loses more than €3.6 billion through imitation clothing available on the market. This makes up almost 14% of the total loss across the European market – placing the UK in third position for damages across the region. Only retailers in Italy and Spain face bigger losses, with around €4.5 billion and €4.1 billion respectively. France takes the number four spot with a loss of €3.5 billion, with similar losses seen in Germany. The cost for Irish retailers amounts to about €220 million.

The Netherlands comes in on the sixth spot, with €988 million in losses, with 7th spot going to Greece where €953 is missed yearly, while Belgium comes next with a loss of €881 million. The top 10 is closed by Austria and Sweden. The countries least affected by imitation clothing are found in the Balkans, Bulgaria and Slovakia, and Luxemburg – with retailers in Estonia losing the least (total damage of €32 million). According to the OHIM the total damage of €26 billion in the EU comes at a cost of 363.000 jobs.

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Lack of high street openings sees UK retail in precarious state

11 March 2019 Consultancy.uk

Changes in consumer behaviour, particularly in favour of online shopping, are starting to take their toll on shop-fronts in the UK, while stagnant wages are hitting peoples’ willingness to go out for food and drink. As a result, the rate of closures is more than four times that for the same period in 2017, although largely reflecting of a lack of new openings.

The retail market has fallen under a cloud of uncertainty in the UK; consumer confidence has dipped, while wages have continued to malinger in negative territory. Retailers are also under pressure from disruptive technology, as consumer sentiment shifts to more online shopping and at-home leisure. While retailers have been able to weather the storm for the past years, transformations, low consumer spending and technology have begun to take their toll.

New analysis from PwC explores the current market conditions in the UK for retail shops, focused on net openings and closings. The market changes in the UK have seen the net closures to date hit 1,123 in H1 2018 across the UK’s top 500 high-streets. The rate of closures was considerably above openings for the first half of 2018, at 1,569 openings and 2,692 closures. Compared to H1 2017, more than four times as many shops closed than opened.

Openings and closures for retail industry

The study considered the most prominent areas to see a reduction in openings and net closures across the retail landscape. Overall, fashion stores were the hardest hit in absolute terms, with a total of 104 closures for H1 2018, followed by public houses and inns, which saw 99 closures in the same period. Electrical goods stores saw a net -44 decline, with a total of 8 openings for the period. Meanwhile charity shops were in a state of relative flux, with 80 openings to 117 closures. The firm notes that service sector shops, including estate agent, banks, recruitment agencies and travel agents, among others, too have begun the process of moving online.

Not all areas of retail saw closures, with coffee and ice cream shops seeing a small net increase in openings over all. Book stores – predictions of their total obliteration appear to have waned – saw a net 18 openings, while supermarkets drew the highest overall growth relative to closures, at 18 opened and 6 closed.

Regional figures for the UK

Not all areas have seen the same level of closures, with the Greater London area and the South East the hardest hit by the current wave of closures, at -268 and -197 net change, respectively, compared to -23 and -25 closures for the same period in 2017. The middle of England too saw considerable closures, with the West Midlands clocking a net -89, and Yorkshire and the Humber down -117 stores overall.

Commenting on the figures, Lisa Hooker, consumer markets leader at PwC, said, “Openings simply aren’t replacing closures at a fast-enough rate. Specifically, the openings across ‘experiential’ chains, such as ice cream parlours, beauty salons and vape shops, haven’t been enough to offset closures in the more traditional categories. Looking ahead, the turmoil facing the sector is unlikely to abate. Store closures already announced in the second half of the year due to administrations and CVAs already will further intensify the situation.”

Related: Artificial Intelligence offers $340 billion opportunity to retail sector.