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M&S and Debenhams: Online retail to continue its surge while retail outlets continue to close

The growing popularity of shopping via the internet, coupled with both the younger and older generations becoming increasingly tech-savvy, has led to a massive surge in shopping online A bit of rewording would be good so it reads better. – whether it be essentials such as food or clothes, all the way to smaller items. The convenience of doing so has meant that fewer sales have been achieved on the high street for major retailers, and sales revenue have transferred to online equivalents. After recent announcements from M&S and Debenhams to continue closing physical stores, online sales will likely continue to boom for most high street brands, leaving its offline stores with less contribution of revenue.

Consumer shopping trends are constantly evolving, and with the growing popularity of e-commerce shopping, pressure has been put on physical stores such as Debenhams and M&S, who used to thrive from offline sales. With consumers changing the way they shop, operating profits for these sorts of businesses have been falling over recent years and have transferred over to competitors or digital store equivalents.

Debenhams and M&S have experienced falling profits, while others such as House of Fraser and John Lewis have seen profits go through the roof. That said, they have all adopted different strategies and it is clear that investment in its stores and online platforms has been key to such sales.

Closing stores does not happen easily. Even though Debenhams have already made such announcements, it is likely the company is still tied into long term leases, each of which comes at a major expense. While Debenhams plans to close up to 10 stores and 11 warehouses, it has unveiled wishes to develop an online platform and to reinvest by revamping other stores. M&S take a slightly different approach, planning to shut six but open 36. This is due to its strategy to focus on the food shopper market and make a majority of stores food & grocery. With M&S already owning a large stake in the luxury food market, it is already well established in this industry and it now wishes to steer away from the department store era.

While Debenhams shutting stores will lead to a loss of jobs, M&S expect to create 1,400 jobs. The high-street job market has been hit severely by the job losses and the closure of stores, with a further 30,000 job cuts expected by the end of 2017.