Fashion retailer, Coast, has fallen into administration amidst persistent financial difficulties. This accompanies a disappointing year for the sector, with sales at a record-low during the three months to September.

Unfortunately, the retail sector has once again been the receiver of bad news. Despite an uplift in wage growth and record-low unemployment, retailers are still struggling to gauge consumer interest. Brexit uncertainty is still dominating people’s thoughts, leading to stunted consumer spending and penny-pinching behaviour. Other factors such as the rising popularity of e-commerce, are also changing the way consumers spend their money.

New figures from the British Retail Consortium and KPMG have shown that sales fell last month by 0.2 per cent. According to the report, non-food items declined by 2.7 per cent compared with the year before, while food sales increased by 3.4 per cent. This contrast between “essential” and recreational spending highlights the reluctance of consumers to spend lavishly.

The administration of Coast is a prime example of the shifting priorities of consumers. While budget clothing retailers like Primark are still holding strong, consumers are not willing to loosen their purse strings for the bigger price tags. Coast, in particular, is a rather specific brand, with its focus on occasion-wear not appealing to the cost-conscious general public.

In contrast to brick and mortar stores, the e-commerce environment is faring better. Clothing sales increased, with online retailers managing to grab the attention from online browsers.

Unsurprisingly, Christmas is expected to be a mild affair, with a separate survey from Barclaycard predicting a spending slowdown during the festive season. According to these figures, consumers are already planning on spending less, with 45 per cent not confident about spending money on “nice-to-have” items during the holiday.


Paul Martin, UK head of retail at KPMG, said: “Like-for-like retail sales in September were down 0.2 per cent on this time last year, but then last year consumers were remaining more defiant in the face of Brexit and shopping regardless.

Brexit uncertainty still grips consumers and business owners. It has forced businesses to hesitant with investment as well as shape how consumers spend their money. This isn’t likely to change any time soon and individuals and businesses may have to overcome the threat themselves.

At the Credit Protection Association, many of our Members either supply to the retail industry, or trade within it. As a result, we have heard many anecdotes and gathered a general picture of the high street, littered with low profits and persistent late payment.

At CPA, we have responded through our debt recovery and credit monitoring services. Our collection team recovers debt and frees up cash flow, while our credit reports, credit rating information and directorship register, all keep our Members alive and kicking.


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The Latest Insolvencies to 12 Oct 2018

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