The cost of the riots across the UK to retailers in terms of missed sales, looted stock and repairs is estimated to have reached £141m so far and could get to just under £400m if the situation continues, according to research firm Kelkoo.
The company’s figures, which were produced by the Centre for Retail Research (CRR), found that UK shops have lost around £80m in missed sales due to the disruption to trading hours caused by the riots across the country during the last four days, while the estimated cost of looted stock stood at £17.4m and the bill for repairs to damaged property at £43.5m.
Kelkoo said that if the rioting continued into the weekend the amount lost by retailers could reach £392m by midnight on Saturday. This would be made up of £242m worth of stolen stock and repairs alongside almost £150m in lost sales for retailers and other services such as bars and restaurants.
Chris Simpson, chief marketing officer of Kelkoo, said: “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% 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.”
Kelkoo said that tourism could also be impacted as a result of the retail riots. It highlighted that if just 1% of tourists change their plans as a direct result of the riots, then the UK’s tourism industry could expect to lose £520m in the next 12 months alone. It said this was on 330,000 tourists choosing alternative destinations, which would be particularly bad news with the forthcoming Olympics.
To put this into context, the company said that the recent royal wedding generated £527m for the UK, marginally higher than the anticipated lost tourism income.
Simpson said: “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. This is particularly problematic with the forthcoming Olympics, an event, which should generate a considerable amount of revenue for the UK.”
