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Good News for Retailers (Finally)

Good weather and positive sentiment have trumped Brexit uncertainty, as consumer spending in August has grown 4.5pc year-on-year.

 

Months of lacklustre profits, sales and consumer spending have led to countless insolvencies and restructuring procedures. The high street has lost a lot this year, from Toys R Us and Maplin to House of Fraser and Poundworld. The bad state of the high street inspired the term ‘retail apocalypse’, with streets littered with brick and mortar debris. Circumstances could shift, with consumer spending set to follow a more upward trajectory. Retailer’s luck may be changing.

The beginning of the summer saw Royals getting married, and the UK (almost) winning the World Cup. Public spirits were uplifted, contributing to stronger spending behaviour as consumers left their frugality behind in the Winter months.

This positive sentiment has continued into August.  According to new data compiled by Barclaycard, essential spending rose by 6.9 per cent and supermarket expenditure by 5 per cent, compared to last year. Even non-essential spending, where sectors have really struggled to garner interest grew 3.4 per cent. Entertainment spending saw a 10.3 per cent uplift.

 

Esme Harwood, director at Barclaycard, said: “Brits have been feeling confident enough in their spending power to enjoy summer events and evenings out.

“Looking ahead, it appears that many consumers are planning to tighten their belts and keep a closer eye on their finances after spending more than usual over summer.”

There are concerns that the sector will struggle to sustain consumer interest. As the evenings cool, consumers’ priorities could shift. Barclaycard revealed that 58 per cent of consumers fear higher inflation, while 56 per cent think they’ll be badly affected by higher energy prices. Particularly with Brexit uncertainty still a major source of concern for many, the future is at the forefront of people’s minds.

If the retail sector is to sustain this strong momentum, its businesses need to become more assured. This can be achieved by fortifying their position on the high street.

At the Credit Protection Association, many of our Members either supply the retail sector, or trade within it; finding trouble with both. We have responded to their distress by proffering credit monitoring services, which protect our Members’ financial future. Credit reports, credit rating information, company directories and County Court data all provide our Members with the knowledge and foresight to protect themselves from late payers and keep their feet firmly on the high street.

 

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