United Kingdom / Analyst Insights
Five Worst Performing Industries of the Decade

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by Lawrence Thomas, Industry Analyst
Dec 19 2019

The composition of the UK economy has shifted over the past five years, and most of the industries that have benefited from this are part of the technology sector. However, certain industries have been left out in the cold, with factors including technological advancement, changing consumer behaviour and rising environmental awareness driving them into decline. As the decade draws to a close, IBISWorld has analysed which industries have performed the worst over the 10 years through 2019-20, looking at the reasons why and what is expected of the future.



Video and Game Rental

Industry definition: Operators in this industry rent physical copies of films, TV programmes and games in stores or over the internet by means of the postal service. The industry does not include the provision of media through streaming services such as video on demand (VOD) or downloadable games.

Revenue CAGR for 10 years through 2019-20: -20.5%

The Video and Game Rental industry has been the worst performing industry in the UK economy over the past decade, as operators have struggled to contend with a shift in consumer preferences towards online streaming services. According to the Ofcom, the number of UK households signed up to the most popular streaming platforms – Netflix, Amazon Prime Video, Now TV and Disney Life – has increased from 3.8 million in March 2014, to 13.3 million in March 2019. This has been facilitated by technological developments, which have enabled faster and more widespread internet access across UK households. Such developments have further fuelled the shift away from the use of physical media such as discs, as many modern internet-enabled devices cannot play disc-format media. This has caused demand for disc format media to diminish over the past decade, limiting the scope for companies in the industry to shift operations towards online rental and postal delivery of physical media, in response to proliferating demand for streaming services. This business model was used by former major company, Amazon Instant Video Ltd, which exited the market in 2017, contributing to the substantial fall in revenue over the past 10 years. Online piracy and illegal downloads have also threatened the activities of the Video and Game Rental industry. This threat has been more prominent in the game rental segment of the market, as the rise of streaming services has spurred a slight decline in video piracy.


Hard Coal Mining 

Industry definition: Firms in this industry mine black coal from underground or opencast mines. Mining includes the extraction of coal and the associated activities, such as washing, grading, pulverising and compressing, which are necessary to prepare the coal for sale. The industry does not include support activities, test drilling or the manufacture of hard coal briquettes.

Revenue CAGR for 10 years through 2019-20: -18.9%

The Hard Coal Mining industry has been declining for decades now. Coal was previously the primary source of energy in the United Kingdom, until the first North Sea gas was brought ashore in 1967. Despite the arrival of North Sea oil in 1975, coal remained the dominant energy generating source until the early 1990’s, when the ‘dash for gas’ led to a substantial increase in the contribution of natural gas to the fuel mix. Consequently, coals share of electricity generation declined from 67% in 1990 to 25.3% at the start of 2010. The use of coal in electricity generation has continued to decrease dramatically over the past decade, particularly over the past five years, during which coal’s share of electricity generation has fallen from 26.9% over the first six months of 2014, to 1.7% during the same period in 2019.

The shift in energy production has been fuelled by government policies aimed at reducing the impact of high-carbon fuels, incentivising the use of cleaner energy and facilitating investment in renewable technology. Such initiatives have been introduced in pursuit of government targets, such as to ensure that 15% of final energy consumption comes from renewable sources by 2020, which will require 30% of electricity production to come from renewable resources. The Hard Coal Mining industry has been notably affected by the implementation of the Industrial Emissions Directive in 2016, which sets new Emission Limit Values, which are legal limits on emissions that power plants must comply with. This has caused several coal-fired power stations to become economically unviable, with only six remaining operational in December 2019, compared with 21 at the start of the decade. Meanwhile, the government has committed to the closure of all coal-fired power stations in the United Kingdom by 2025, in pursuit of longer-term climate change targets, such as that to achieve net-zero emissions by 2050.


Consumer Electronics Manufacturing 

Industry definition: Companies in this industry manufacture electronic audio and video equipment for home recording and reproduction, televisions, monitors and displays, video game consoles, public address systems and amplifiers.

Revenue CAGR for 10 years through 2019-20: -12.8%

Despite increasing demand for more technologically advanced products, the Consumer Electronics Manufacturing industry has declined significantly over the past 10 years, as many manufacturers have shifted or outsourced production capacity to low-cost countries such as China, and many others in East Asia and Eastern Europe. Manufacturers in the United Kingdom have struggled to compete, as they face higher production costs. For example, during 2010, Toshiba closed its LCD TV factory in Plymouth, resulting in the loss of 270 jobs. Its production capacity was moved to Poland on the grounds of lower costs and superior technology, and few LCD TVs are now assembled in the United Kingdom.

The industry is highly globalised, with imports satisfying almost all domestic demand and exports accounting for a significant share of industry revenue. The value of the industry’s exports has fallen over the past decade, as UK manufacturers struggled to compete on price with overseas competitors that have much lower operational costs. However, the industry has benefited from favourable exchange rate fluctuations in the latter part of the past 10-year period, recording significant growth during 2016-17, in response to the substantial depreciation in the value of the pound following the EU referendum.


Precious Metals Production

Industry definition: Operators in the Precious Metals Production industry refine precious metals like gold, silver and platinum, in addition to producing precious metal alloys, wires through metal drawing and precious metal foil laminates.

Revenue CAGR for 10 years through 2019-20:-9.8%

Platinum has a range of uses but is best known for its role in emission-reducing catalytic converters on vehicle exhaust systems. World platinum prices have plummeted since 2011, partially due to falling demand from the Japanese automotive market following an earthquake, which prompted production cutbacks.  

Weak automotive demand across Europe, the world’s largest auto-diesel market, has also contributed to the decline in platinum prices. The 2015 Volkswagen emissions scandal only added to the industry’s troubles. The car manufacturer admitted to rigging nitrogen oxide emission tests on 11 million diesel cars, prompting concerns surrounding demand for platinum, which contributed to a 23.9% slump in prices in 2015. Meanwhile, the shift towards low-carbon economy has fuelled the uptake of alternatively fuelled vehicles (AFVs), adding downward pressure to prices through reduced demand.

Investor demand has also played a role in the industry’s performance. In times of economic turmoil, gold and other precious metals are considered to be safe havens, which drives up their prices. Political and economic uncertainty has offered the industry some relief more recently. Notably, the gold price spike following the EU referendum in June 2016 and US election in November of the same year helped arrest the industry's precipitous decline, supporting revenue growth of 5.5% in the 2016-17, compared with a contraction of 25.2% in the previous year. Meanwhile, declining prices in almost all asset classes over the three months through December 2018 encouraged investor to flee to gold as a safe haven store of wealth. This helped raise the price of gold and benefited industry revenue.

While the industry has declined significantly over the past decade, albeit with a heavy amount of fluctuation, it is expected to return to growth over the coming five years. IBISWorld expects rising demand for diesel vehicles from emerging economies to support platinum prices and consequently industry revenue, despite the continuing threat of the growth of electric vehicles. Additionally, there are plans for gold and silver mining to being in Scotland by February 2020.



Industry definition: This industry covers licensed establishments that sell beverages for on-site consumption and usually charge a fee for admission.

Revenue CAGR for 10 years through 2019-20: -8.3%

Over the past decade, the Nightclubs industry has performed poorly due to shifts in drinking habits, changing licensing laws and declining off-trade alcohol prices.

Alcoholic beverages account for over half of industry revenue, and operators have been contending with declining alcohol consumption over the past decade as health consciousness has continued to grow and consumers swap alcohol for soft drinks. According to the ONS, alcohol consumption per capita has declined from 1.3 litres in 2009-10, to an estimated 1.1 litres in 2019-20.

Low supermarket prices have also put considerable pressure on the industry, as young people often drink supermarket-bought alcohol at home before going to a nightclub to save money. According to the British Beer and Pub Association, supermarkets and off-licences represented 50% of all beer sales in 2017, illustrating the strong trend for drinking at home instead of going out to clubs. Growing off-trade alcohol consumption has been exacerbated by tightening finances, particularly among those aged between 18 and 24. Higher university tuition fees and high youth unemployment have encouraged students to be more guarded with their discretionary spending, shifting the demographic's leisure and nightlife culture towards at-home drinking.

Meanwhile, amendments to the Licensing Act in 2003 allowed many drinking establishments across England and Wales to remain open past 11.00pm and under these changes it became easier to obtain 24-hour drinking licences. This resulted in an increase in the number of late-night bars, increasing competition for nightclubs. Although some nightclubs have benefited from longer hours, revellers now often stay in bars and pubs rather than moving on to a nightclub.


For a printable PDF of Five Worst Performing Industries of the Decade, click here.

IBISWorld industry reports used in this special report:

B05.100   -   Hard Coal Mining in the UK
C24.410   -   Precious Metals Production in the UK
C26.400   -   Consumer Electronics Manufacturing in the UK
I56.301   -   Nightclubs in the UK
N77.220   -   Video & Game Rental in the UK

For more information on these, or any of the UK’s 400+ industries, log on to www.ibisworld.co.uk, or follow IBISWorldUK on Twitter.