Retail Sales Finally Rise, But Stronger Cash Flow Will Sustain It

10th April 2018.

UK retail sales picked up in March despite lingering cold weather deterring shoppers from braving the high street.

It has been a difficult past year for retailers, with even the more powerful businesses suffering from slow profits, and some even falling to insolvency. Last year’s holiday season proved slower than expected, as was discount holiday bonanza, Black Friday, and since then the high streets have emptied. With online services offering consumers all manners of products, from clothes and shoes to food and drink, the physical pleasure of shopping has been diminished. Last month, however, the retail sector is shakily getting to its feet.

After a string of company insolvencies, from Toys r Us to clothing retailer, New Look, sales are finally rising and retailers could be given a new lease on life. According to new figures from the British Retail Consortium, retail sales rose by 1.4 percent in March, up from 0.6 percent growth in February. While the high streets will still need to work hard to keep their customers from returning to their laptops, this is a promising start to the year.

Many of our members at the Credit Protection Association are retailers and have struggled to make a profit in this difficult climate. Our debt recovery and credit management products have helped, however, both with freeing up cash flow and strengthening the credit of the business.

Food sales, in particular, saw a good month, with a 4.2 percent rise in the three months to end of March. That was up from 2.8 percent in the previous three-month period.

The figures showed a slow down in the first quarter with the non-food retail sales down 1.8 percent year on year on a like for like basis.

Helen Dickson, chief executive, BRC said: There is hope that, with the gap between inflation and wage growth finally narrowing, consumers’ purse strings will slacken to some extent. But the grip on spending power will persist over the course of the year.

Paul Martin, head of retail, KPMG said: The start of 2018 has already seen a list of casualties, and with trading conditions unlikely to change in the short-term, retailers are increasingly having to be clear on their point of differentiation. It appears that unless you’re a grocer, bridging the gap between online and off-line sales offers the best means of success in this climate.”

Brexit uncertainty and inflationary pressure may still be tormenting the business world, but the grip on retailers is at least easing. While a gradual incline in sales should raise the morale of retailers slightly, more needs to be done to beat the online competition. Retailers need to consider what brick and mortar can offer consumers that e-commerce cannot. This could be through offering a larger-than-life experience in-store, such as store DJs or cafes and eye-catching visual mechanising. To free up the cash flow neccessary for such expansion, the Credit Protection Association offers up its skills and expertise to business owners.

The debt recovery services we offer here at CPA will chase down those late paying suppliers and satify those unpaid invoices, while our credit management products concentrate on your credit rating, ensuring your business returns to the high street in the very best shape.