TSB Cutting Almost 1000 Jobs In Consumer Behaviour Switch
TSB has recently announced that it will be close a third of its branches and cut 960 jobs, in a move that has been described as a “dark day for the finance sector” by one of the UK’s largest unions, Unite.
The move has come not in response to the ongoing pandemic, but rather as a response to changing customer behaviour. Increasingly online behaviour patterns have driven consumers to focus more on the online side of banking, and with fewer people banking in person, branches could be running the risk of becoming obsolete in years to come.
High Street Demise
One trend that this decision seems to highlight is that of a shift away from the high street. The emergence of Amazon, eBay and online grocery retailers has led to your typical high street shop slipping away.
The inability to adapt and make the most of this increasingly online demand has already proven to be damaging to companies such as Primark, who struggled throughout the lockdown period when they were unable to get shoppers through their doors.
Although this was a much more sudden shift in behaviour than that which has caused the TSB decision, it is very much the same cause.
This is another significant warning shot across a range of portfolios, particularly those which rely on high street businesses. With another lockdown on the horizon and consumers being gradually pushed out towards using online services, keeping your assets in companies that rely on a physical presence is becoming riskier and riskier.
If you’re looking to invest in retail, look to those that can sell online. They have future-proofed their supply chain, and for businesses like TSB that are having to downsize, the future is now.
However, it must be noted that banking as a sector isn’t especially vulnerable. Considering the reasons for TSB cutting these jobs, consumers are still clearly using TSB services, just in a different manner.
Whilst this is bad news for the high street and the employees in these branches, the banks themselves will still operate at a similar level and are therefore not facing a critical risk when it comes to their share of the market.
If you’re looking at this announcement in terms of your portfolio, any banking shares should remain stable through this trend.