Store profit margins halved by soaring costs

Meadowhall shopping centre Sheffield

Store-based profit margins have been decimated by rising costs over the last eight years, new research has shown.

Store-based margins have slumped by more than half from 8.8% in 2009/10 to 4.1% in 2017/18, according to a study by Alvarez & Marsal and Retail Economics.

Operating costs have climbed by 10.8% since 2014, as a result of factors such as inflexible lease structures and changing shopping habits. Retailers now have around 20% more store space than they need and can financially justify.

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