High street reels from a black Friday as consumer shift online takes its toll

Royal Bank of Scotland, Toys R Us and Thomas Cook unveil closures affecting more than 300 stores and nearly 2,000 jobs in total

Iain Withers, Ashley Armstrong

Ayesha Javed

THE impact of the consumer shift to digital shook the high street yesterday as the banking giant RBS and toys retailer Toys R Us both announced plans to axe a quarter of their branches and stores, while Thomas Cook said it would shut 50 outlets.

Taxpayer-owned RBS sparked a political furore after announcing plans to close 259 of its 1,003 branches, amid growing fears major lenders are abandoning Britain’s high streets. The closures will affect the whole of the UK, with 62 RBS and 197 Natwest branches closing, with the loss of 680 jobs.

The move provoked anger from politicians and business groups, while un- ion Unite warned the closures could “mark the end of branch network banking”.

Meanwhile it emerged that the struggling retailer Toys R Us is to announce a company voluntary arrangement (CVA) next week to close around 25 of its 105 shops in the UK. The retailer employs 3,200 people in this country; insiders said the shop closures could affect between 500 and 800 jobs.

Corporate restructuring firm Alvarez & Marsal has been lined up to handle the CVA, according to Sky News which first reported the shop closure plans. Thomas Cook also announced plans to close 50 stores in the UK yesterday in a move that could affect up to 400 staff. The travel operator said that if the plans went ahead, it would close the Thomas Cook and Co-operative Travel branded stores by March 2018. The shops affected are either near other Thomas Cook locations or are experiencing a drop in profits due to declining footfall, the firm said. The company planned to redeploy many of the staff affected, a spokesman said.

A common factor behind the closures is the consumer shift to digital for shopping and services. A spokesman for RBS said yesterday that the lender had to respond to changing customer needs, adding that over three years the number of customers visiting branches had fallen 40pc, while mobile transactions had jumped 73pc.

However, the business lobby group the Federation of Small Businesses (FSB) said that while all of its members were using online banking, visiting branches was “still hugely valued” by small firms. Mike Cherry, the FSB’S chairman, said access to cash was “a big issue” for trade in thousands of towns and villages, especially in rural areas.

Thomas Cook also pointed to the rise in its online sales yesterday. While stores generated 47pc of Thomas Cook’s bookings in 2017, online sales have grown by 27pc in the UK, it said.

The news at Toys R Us comes just as the retailer gears up for its busiest time of year but insiders said that all Toys R Us shops will continue to trade through the Christmas period and into the new year. The store closures should not affect gift cards or return policies. However, there is a real threat that if 75pc of Toys R Us creditors and landlords do not support the CVA the business could face insolvency. It is understood that Toys R Us’s UK operations have been loss-making for seven of the last eight years.

Toys R Us filed for bankruptcy protection in the US in September after the retailer was crippled by $5bn (£3.8bn) of debt. The financial burden had hindered its ability to invest online, which has meant that it has fallen far behind Amazon and supermarkets which have also engaged in a fierce price war. The retailer’s vast warehouse-like stores have also been in desperate need of modernisation which has meant that their shops have become less appealing.