Retailers Hit Hard By Sales Slowdown

6th February 2018.

Britain’s retailers battled through “tough” trading conditions in January as consumers saved their cash for a raining day, or just for the weekly food shop.

According to new data from the British Retail Consortium (BRC) and KPMG, consumers are shunning big-ticket prices, and giving non-food sales its worst performance since 2009. Furniture sellers, shoe shops, and high street clothing stores are just some of the retailers taking a hit. Food sales increased by 2.9 percent but consumers were forced to spend more in response to the higher prices. Consumer spending has been squeezed in recent months, having a positive effect on consumer debt and borrowing, but having a devastating impact on retailers.

Here at the Credit Protection Association, many of our members are from the retail and services sectors. The fall in consumer spending has had an effect on businesses, as demand has lessened and sales have been stretched thin. As online retailers become more popular, and less shoppers want to trudge the streets, we encourage our members to adapt accordingly. Don’t drop before they’ve shopped, there’s still plenty of ground to cover.

The British Retail Consortium (BRC) and KPMG reported that the squeeze on consumer spending power has also hit the broader services industry, which suffered its worst month since the aftermath of the EU referendum. Car sales in particular saw a slump in sales, according to new industry figures.

There is good news on the horitzon however, as the Bank of England expects wages growth to rise during the year ahead and inflation to fall.

The latest survey of the services sector from IHS Markit and the Chartered Institute of Procurement and Supply (CIPS) found that a loss of clients and lingering Brexit uncertainty had led to a dip in activity.

Retailers had a tough 2017, and 2018 is looking to be just as trying. The holiday season back in December didn’t deliver the sales that the sector hoped for, and a shift in consumer spending has hurt retailers further. Small businesses in particular are suffering from the rise in online retail, as many are either too reluctant or too out-of-pocket to invest in new technology. We encourage our members of the Credit Protection Association to keep up with new technologies and innovations. The customers who would browse the high streets for five hours have now been replaced by the digital customer who will browse the internet for five minutes.

If your business is unable to invest in anything new, or if your cash flow is suffering from the drop in demand, please come to CPA! We can free up cash flow and clear you of late payers, non-payers and bad payers. Get in touch with a member of our team with the details below!