Retail think tank says sector is sliding back to banking crisis level.
Britain’s preeminent retail think tank is calling on shopkeepers across the country to deploy all of their “incredible resourcefulness” to drive growth in the face of persistent headwinds.
Following its monthly sitting in July, the KPMG/Synovate Retail Think Tank (RTT) says that the sector is suffering as difficult a period as in the darkest days of the 2009 financial meltdown.
KPMG analyst Helen Dickinson says that the retail industry is now officially in recession, with retail health likely to fall back to the levels of the banking crisis. “With further dark clouds on the horizon, such as threats to the stability of the Euro and the US dollar, none of the RTT members is feeling optimistic about retail in the short to medium term,” she adds.
Tim Denison, Synovate’s think tank member, agrees that shoppers are being squeezed from all sides. “Consumers are not in the position they were a few years ago to keep the economy buoyant. Footfall remains down by around 4% year on year, and it is difficult to see what will drive any immediate improvement now that the austerity measures are kicking in. Of course, it is not all gloom and doom; some retailers are well on their game and will prosper against their weaker competitors. For others, including many smaller independents, the pressure remains firmly on.”
The second quarter could have been even worse, if it weren’t for a spell of good weather and extra bank holidays around the late Easter and the Royal Wedding.
“The only good news for retailers was a sunny late and the Royal wedding. However, any expectation that they would boost trade for more than a couple of weeks was short-lived. May and June showed how weak the underlying trend remains. Pressure on disposable income with new, recently announced rises in utility bills has only hurt consumer confidence further and clearly many Britons are no longer regarding shopping as the pleasurable experience they once did,” concludes Neil Saunders, from Verdict Research.