UK high street suffers a blow in April
The latest official figures show that Britain’s retailers experienced the sharpest drop in sales for over 20 years last month. The downward pressure was as a result of poor weather conditions, the timing of the Easter break and ongoing pressures with household finances. As a result, customer spending saw a significant dip.
Falling Sales
The British Retail Consortium and KPMG calculated that high street sales fell by 3.1% in April, evidencing a broader economic slowdown. Non-food spending was particularly affected, and retailers are now facing the prospect of challenging conditions for the rest of 2018, despite the news around rising real wages compared to inflation.
A number of big-name retail brands have gone bust within the last 12 months. Toys R Us was the most recent in February, along with Maplin and Warren Evans, the bed maker. East and Juice Corp folded in January, as did Multiyork furniture and Feather & Black in November.
Brands Under Pressure
Other retailers are now under pressure, including New Look, House of Fraser and Debenhams. Why? Because of higher labour costs driven by the new minimum wage, new spending patterns, the growth of online shopping – and of course, the spending squeeze for the average household. Other brands such as Poundworld and Carpetright are negotiating with unit landlords for rent cuts and seeking to close stores.
Retail industry vacancies have also fallen in response to the news. A survey found that the retail sector was now the 10th most active recruiter, compared to the third most active a year previously – after nursing, catering, hotel work and medical care.
The hope now is that the Royal Wedding and the World Cup later this spring and summer will help to kick-start retail spending and to encourage the feel-good factor that sees customers spending on the high street once again.
Retailers are also being encouraged to adopt digital commerce methods, to invest in their strategy and to ensure that they are truly meeting the changing needs of Britain’s increasingly demanding, service-driven and digitised customers. Those who do can hope to buck the trend and enjoy success in the coming year. Those that fail to evolve and reposition themselves within the current retail landscape will surely only continue to decline.