Dismal festive season for UK high street
10 Jan 2019
Figures released today by the British Retail Consortium (BRC) show that Christmas 2018 was the worst on record for the British high street since 2008.
Festive season retail sales were flat, while like for like sales dropped 0.7 per cent when compared with December 2017.
Despite many stores slashing prices to attract more shoppers, the figures show that consumers "chose not to splash out this Christmas", BRC Chief Executive Helen Dickenson says.
"The worst December sales performance in ten years means a challenging start to 2019 for retailers, with business rates set to rise once again this year, and the threat of a no-deal Brexit looming ever larger,” she added.
“Retailers are facing up to this challenge but are having to wrestle with mounting costs from a succession of government policies - from the apprenticeship levy, to higher wage costs, to rising business rates.”
But whilst retailers experienced little festive cheer this season, the food sector did see a slight improvement in spending with sales rising 1.8 per cent when compared with the previous year.
All in all, 2018 was a dismal year for the retail industry, with a total of 125 retailers collapsing and a 53 per cent increase in Company Voluntary Agreements (CVAs) on 2017. Administrations also rose by six per cent from 118 the year before.
It was however not all doom and gloom, as John Lewis reported an increase in last-minute Christmas shoppers, up 4.5 per cent for the week ending 29 December, compared with the same period last year. Next also reported a 1.5 per cent increase in online sales for the festive period, 28 October to 29 December, showing the value that digital transformation brings to the retail sector.
In order to survive and thrive, businesses in the retail industry should carefully separate out which factors have affected them and adopt strategies for weathering the storm, such as undertaking proactive store closures, modernising through technology, or responding quickly to changing consumer preferences. Business owners also need accurate, reliable and timely financial information, whether that be profit or cash focused, or both, to accurately and effectively manage the company's finances and drive growth.
At Beavis Morgan, our SME business experts can help you identify your requirements and then design and implement a system that will provide all the information you need, within a cost effective and efficient framework.
Being able to understand and evaluate your business through real-time information on actual performance is critical and could mean the difference between survival and business failure.
Through our partner businesses, BM Structured Finance and BM Advisory, we are able to help with sourcing and restructuring debt finance for businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.
To find out more about how we can help you and your SME business, contact Steve Govey.