December is the most lucrative month for retailers with Christmas shoppers taking to the streets in their hoards to look for the perfect present for their loved ones. However, according to retail research group Springboard, the number of shoppers visiting high streets across the UK fell by 3.2% in November 2018 and is predicted to fall by a further 4.2% in December.
It’s no secret that the high street has seen a relentless decline over the past decade with annual footfall rising only one year (2011) out of 10. The masses of failures in the retail sector have been blamed on online competition, high business rates and changing consumer preferences resulting in consumers tending to now give experiences such as theatre tickets rather than products as gifts. However the recently reported slowdown at Tesco and Sainsbury’s along with poor figures from John Lewis show that it’s not just the high street that is struggling within the retail sector. The chaos of Brexit is taking its toll on consumer confidence with the discount food stores Aldi and Lidl coming out on top while supermarket sales are flat-lining.
Diane Wehrle, a marketing and insights director at Springboard, said: “There has been more discounting this year by retailers, Black Friday was not a success and there is low consumer confidence because of the maelstrom of Brexit. I think a number of retailers will be really pinched in the new year. Fashion and department stores are particularly vulnerable.” Even discount clothing store giant Primark has warned of “challenging” trading conditions.
The political turmoil doesn’t look likely to abate any time soon with MPs having triggered a vote of no confidence in PM Theresa May just this morning, so it’s unlikely that consumer confidence will pick up any time soon. Whether you trade with the retail sector or not, if the failure of a supplier that you have extended credit terms to is a concern you would rather not lose sleep over this Christmas, contact Acumen about arranging a trade credit insurance policy or reviewing your current arrangements.