UK shops have lost around £80 million in missed sales due to the disruption to trading hours caused by the riots across the country during the last four days, new research has found.
Once the cost of looted stock, an estimated £17.4 million, and the bill for repairs to damaged property, another £43.5 million, are taking into consideration, shopping & price comparison firm Kelkoo predicts that the current overall cost to the industry is around £141 million so far.
If riots continue this will increase of course and Kelkoo worries that if the violent scenes, which have seen thousands of rioters smash, burn and steal from stores in numerous UK towns and cities, continue into the weekend the amount lost by retailers could reach £392 million by midnight on Saturday.
Chris Simpson, Chief Marketing Officer of Kelkoo, commented: “Despite the chaos showing signs of abating, UK retailers are sadly going to feel the fallout of this week’s riots for several months to come.
“Much of the cost will be picked up by insurers but we cannot overlook the fact that on top of the damage caused, retailers, restaurants, pubs and other service providers have been forced to shut their doors to business in order to protect their staff, customers and premises.
“This comes at a time when retailers are already struggling to stay afloat with sales up by just 0.6 per cent on July 2010. Despite a small move in the right direction, I expect this could be a very different picture in the coming months as consumers confidence has taken a turn for the worst.”
Along with a dip in domestic consumer spending, the recent street violence could also damage the UK’s reputation as a retail tourist destination.
The majority of the damage created by the civil unrest has been inflicted on London, whose West End areas and major shopping centres are a major draw for international shoppers, and Simpson worries that those consumers may now be put off visiting these shores.
“As scenes of violence span the globe making headline news across the world, this could have a serious impact on UK tourism over the next 12 months,” Simpson added.
“This is particularly problematic with the forthcoming Olympics, an event which should generate a considerable amount of revenue for the UK.
“Our research suggests that if just one per cent of tourists choose an alternative destination to the UK, we stand to lose £520 million in lost revenue over the next 12 months. This is marginally less than the amount of income generated by the royal wedding back in April.”
During the mornings after the nights of chaos before, retailers’ minds have been preoccupied with cleaning up damage and protecting their businesses further.
Industry charity Retail Trust has now started a Twitter campaign to raise money for affected traders called #highstheroes. To donate to the cause people can text HSTH11 and the amount they are giving to 70070 or alternatively visit www.retailtrust.org.uk.