Business credit management Finance and Legal Government Information Insolvencies

Retail Sales at 12-Year-Low in May, Business Finances Can Improve

The high street has recorded its worst year-on-year May performance for 12 years despite the royal wedding, warm weather and two bank holidays, figures show.

Despite slight upturns in sales on account of good weather and decadent public holidays, these were not enough to budge historic sluggish sales behaviour on the high streets. Despite the £561 million retail boost that the Royal Wedding was expected to provide, many stores were left abandoned for Saturday trading, with millions of consumers piling into living rooms and outdoor screenings, to witness the cultural event.

According to BDO’s High Street Sales Tracker, sales were down 2.2 percent in May last year, making it eight months since sales have shown growth of 1 percent or more. More specifically, the lifestyle sector saw a 3.8 percent drop in May, with homeware sales hit particularly hard. Once again it is the non-essential items that consumers are hesitating to purchase. Inflation has faded and interest rates have remained low, but consumer confidence has still not drastically improved.

The stubborn disinterest of consumers should not be taken as a lead-up to tragedy, and there are techniques that business owners can exercise to gauge attention. At the Credit Protection Association, our debt recovery services chase down unpaid invoices and award Members with extra cash to spend on what they need. This new financial confidence has been directed at purchasing new equipment or technology, or new store renovations, all with the intention of updating business concepts and catching the eye of at least one new customer.

These new figures highlight the volatility on the high street that is contributing to some high-profile casualties and store closures from the likes of House Of Fraser and Marks and Spencer.
Sophie Michael, head of retail and wholesale at BDO, said the figures highlighted the troubles faced by the high street.
She said: “Consumer spending patterns continue to be both volatile and unpredictable, making it increasingly difficult for retailers to identify trends and respond accordingly.

“Whether it’s falling discretionary income, unexpected weather or a growing preference to spend on experiences, the result is creating growing challenges on the high street which are clearly affecting retail performance.”

Sophie Michael, head of retail and wholesale at BDO said: “As people are increasingly treating retirement as a gradual process, regular discussions with a financial adviser can help to make sure that your retirement finances are sufficient to allow you as many options as possible.

The high street will soon be an uninhabitable space for retailers, with so many businesses struggling to pay the crippling business rates and other business costs. Household budgets have improved on account of accelerated wage growth and fading inflation, but consumer turnout remains low. Brick and mortar stores have stiff competition from online retailers such as Asos and Amazon, where discounts and quick deliveries are simpler for the fast-paced modern consumer.
While traditional businesses are reluctant to embrace modern concepts, doing so is the only way to overcome both domestic and international competition. Investing in new equipment, technology or services is a good way of gauging interest from even the most penny-pinching consumer.

At the Credit Protection Association, our debt recovery services have been used to free up cash flow for our Members. The extra cash has then been used to purchase new computers or telephones for head offices, new gadgets or just new web designers to create an eye-catching website to boost name and brand. While our Members invest, our credit management products protect these investments through thorough credit checks and status reports.

Here at CPA, we fight to the tooth for our members, particularly those who have suffered through late payment and bad payment practices. Furthermore, we recently created a new department within our company dedicated to getting our members rightly compensated in accordance with the Late Payment of Commerical Debts (Interest) Act 1998. This has unlocked hidden cash and potential for our members and brightened their prospects and longevity on the high street.