With the cost-of-living crisis biting hard into wallets, many shoppers in Britain have been forced to switch their normal habits and head into budget stores in search of better prices for their weekly essentials.
But cut-price retailers are also not immune from the tough economic situation, with a series of well-known budget retailers like Iceland, B&M Bargains and Wilko having to close some UK stores.
One retail expert has told MailOnline that the ‘culture of bargain-hunting for fun is over, at least for now’, adding that discount stores which do not sell essential items will ‘struggle in the current environment’.
Iceland has recently shut supermarkets at Bromsgrove in Worcestershire and Basingstoke in Hampshire, with four more set to go over the coming weeks at Rhyl and Bangor in North Wales, Bristol and Newport on the Isle of Wight.
Variety store B&M meanwhile has shut stores at Newport in South Wales and Stockton-on-Tees in County Durham – with three further outlets in Kilmarnock, Belfast and Bristol set to go before the end of this month.
As for homewares chain Wilko, some 15 stores have gone or will do soon – including in Bournemouth, Birmingham, Shipley, Scunthorpe, Leicester, Grantham, Redditch, Rotherham, Skegness, Sutton Coldfield and Merthyr Tydfil.
In the hospitality industry, budget pub chain Wetherspoon has also suffered and currently has about 20 outlets across the country up for sale – although these will continue to operate as its pubs until or unless they are sold.
However some discount retailers continue to perform well, with the UK’s discount grocery market set to grow by 23.9 per cent over the next five years according to IDG – with German supermarkets Aldi and Lidl leading the way.
Poundland is among those posting strong results, with the chain set to open 12 new stores over the next few weeks – including four in Glasgow, Partick, Rotherham and South London this month and eight more in April.
Last month its rival Poundstretcher announced plans to open 50 new stores by the end of this year, while Home Bargains has opened stores in Durham and Ramsgate over the past month and will do in Preston on March 18.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, told MailOnline: ‘There’s no denying the cost of living crisis has pushed more Brits to the bargain-end of the shopping spectrum than ever before.
‘This is a trend most acutely felt at the supermarket, where the likes of Aldi are running away with market share, and the bigger names are having to compromise on margins in a bid to keep up with ultra-low prices.
‘However, the culture of bargain-hunting for fun is over, at least for now. People are sniffing out lower-cost essentials, like food, but aren’t being pulled towards other discount shops in the same way.’
She said that stores which ‘might be good value, but don’t sell essentials, will struggle in the current environment’.
Ms Lund-Yates continued: ‘So for some corners of the economy, like discount supermarkets, the UK’s fondness for bargains is acting as a real boon, but at the same time, the real pressure on incomes means that’s where the spending stops for a lot of households.
‘For names like B&M and other large discount names, volumes are key rather than pricing power, so a continued decline in discretionary spending could spell big trouble for margins in the short to medium term.’
B&M and Wilko are similar retailers in that they both sell a huge range of items for the home – from furniture to electricals and stationery to cleaning products – and try to lure in shoppers with big discounts on popular items.
Wetherspoon told MailOnline the pubs on the list for possible closure are ‘up for sale and will continue to operate as Wetherspoon pubs until/unless they are sold’, while Wilko confirmed there were no further store closures forecast on top of the current list. MailOnline has not yet had responses from Iceland or B&M.
Earlier this week, figures from Barclays showed consumer spending grew just 5.9 per cent year-on-year in February as Britons continue to cut back on non-essential spending.
The figure was affected by the lifting of Covid restrictions last year, which caused a spike in spending due to pent-up demand, bringing down this year’s figures.
However growth of supermarket spending slowed to an increase of just 6.6 per cent, with 49 per cent of consumers cutting down on luxuries or one-off treats for themselves and 48 per cent turning to value ranges.
Almost one-third of Britons (30 per cent) say they are aiming to cut their Easter spending due to rising costs, with 25 per cent of these people planning to spend less on Easter eggs and 22 per cent scaling back holiday plans.
Also this week, the British Retail Consortium said retail sales held up better than expected last month as consumers proved they are still ready to celebrate events such as Valentine’s Day despite the-cost-of living crisis.
Total UK retail sales were up 5.2 per cent in February against an increase of 6.7 per cent for the same month last year – below the three-month average of 5.5 per cent and above the 12-month average of 2.4 per cent.
That was according to the BRC-KPMG Retail Sales Monitor, which also found food sales increased by 8.3 per cent over the three months to February and non-food sales were up 3.2 per cent.
The High Street has suffered a torrid decline in recent years which has been exacerbated by the pandemic as stores closed and many Britons switched to online shopping for good.
The Centre for Retail Research found 47 shops on average closed for the final time every day last year. The total of 17,145 shutting in 2022 was up almost 50 per cent on the 11,449 shops which closed in 2021, during the pandemic.
Among the big names to have gone from the High Street in recent months include Paperchase, which went into administration in January but whose brands and logo have now been bought by Tesco.
Meanwhile Scottish clothing retailer M&Co will close all its 170 stores across the UK this Easter after going into administration last December. Almost 2,000 jobs will be lost because of this.