THE UK's high street giants could be wiped out in weeks if the coronavirus continues, consumer experts have warned.

Experts have painted a bleak picture of the scenario facing the UK high street as major retailers teeter on the brink of administration.

A study of 34 non-food retailers including Dunelm, JD Sports, John Lewis and Next has found that many may not survive the pandemic sweeping the nation.

Even after government support, more than half of major non-food UK retailers will run out of cash within six months, according to the report.

The study was conducted by professional services firm Alvarez & Marsal (A&M), in partnership with Retail Economics.

It found that five out of the 34 major non-food retailers analysed already had negative cash flow at the outbreak of the pandemic.

This comes as the UK's fiscal watchdog warned that more than two million people could lose their jobs and the economy may fall off a cliff because of the lockdown.

The Argus:

Modelling by A&M and Retail Economics shows that a 10 per cent reduction in sales would have resulted in over two-thirds of major U.K. retailers falling into negative cash flow.

But sales are forecasted to have dropped as much as 70 percent since the lockdown was introduced on March 23, tipping every retailer sampled into immediate negative cash flow.

A&M said: "Should the lockdown persist into the summer, working capital demands will intensify and large parts of the sector will be decimated as swathes of retailers seek additional funding in order to survive."

Richard Fleming, Managing Director and Head of Restructuring Europe, A&M, said: "Government measures have spared the major retail brands from immediate collapse.

"You could characterise this three-month period as a payment holiday.

"But prudent retailers are still pivoting their focus towards what cashflow they have and can expect in future.

"This is the essential fact base upon which turnarounds can be built.

"The next few weeks will be critical. Retailers need to ask themselves the tough questions and take steps to address underlying operational issues while they still have the chance."

Earlier this weekm the Office for Budget Responsibility (OBR) said unemployment could hit 3.4 million - up from 1.3 million - leaving around one in 10 of the working population without a job, while the economy may shrink by 35 per cent between April and June.

Chancellor Rishi Sunak told reporters that not every business or household could be protected, but that a 'bounceback in growth' is expected when the crisis eases.

It came as a survey from the British Chambers of Commerce suggested around one in three British businesses has furloughed between 75 per cent and 100 per cent of its workforce.

* Are you a business owner who has been threatened with legal action over unpaid rent? Email: charlotte.ikonen@newsquest.co.uk.

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