Retail
The UK retail sector was already undergoing fundamental change well before the Pandemic struck, as consumer shopping preferences shifted away from bricks and mortar high street-focused spending to online channels. Between 2019 and 2021, online sales continued to rise with growth of 81%. But, with the cost of living crisis and high inflation squeezing personal finances, there are significant warning signs of financial risk, especially for smaller retailers.
Retail
When we last looked at the UK retail market’s finances in March 2022, the economy had staggered out of the darkness of the pandemic, only to find itself facing new storm clouds from the war in Ukraine and rapidly rising inflation. The energy crisis had started but the nightmare of its full impact on businesses and consumers was not yet fully apparent.
The financial data available then did yet fully reflect the impact of the pandemic, with the exception of some of the major listed retailers. The filing deadline regime at Companies House means that even now the figures available in the public domain for the vast majority of retailers still date back into the pandemic period, but the picture of its effects is becoming clearer.
On the whole, the financial profile they reveal has not deteriorated during the past few months as much as general media and industry comment might suggest, but the warning signs of trouble ahead are only too clear, especially for smaller, owner-managed retailers.
Business challenges faced by the retail sector
- Understanding customer demographics and being relevant for them
- Downsizing and re-sizing store portfolios
- Improving online, multi-channel and physical store experiences for consumers
- Re-shaping staffing profiles to match changed business models
- Improving profitability of online offerings
- Managing the returns phenomenon
- Staying nimble in a rapidly changing retail environment
- Repaying loans taken out during the pandemic
- Negotiating with landlords on rent arrears and future rents
- Managing supply chain disruption from Covid-19, Brexit and the Ukraine conflict
- Repairing balance sheet damage caused by falling property and other asset values
- Making sure the business is both solvent now and viable for the future, especially with increasing energy costs and other business expenses.
- Securing adequate funding, especially for post-pandemic growth
- Producing meaningful and realistic financial forecasts
Helping businesses in the Retail sector
If you would like to hear more about how we can help your business to best manage any current challenges, please contact us at or call us at our nearest office to you.
Market Sector Report
The UK Retail Market – warning signs of trouble ahead
As we are fast approaching Christmas, how is the UK retail market responding to the current economic pressures and what does the future hold?
Read the Report