The shops are still having problems, but the closures are slowing down
Retailers continue to face challenges on all fronts, not least because of the worsening Brexit crisis and associated uncertainty. Overall, however, online commerce continues to grow and the number of retail liquidations is slowing.
As Dun & Bradstreet's latest report on the second quarter of British industry says. It shows that retailers continued to face a challenging business environment during the first half of the year. Among the decline in annualized sales reported by both BRC and ONS, and a growing number of vacant stores, retailers are exposed to the brunt of consumer uncertainty, particularly with regard to political and economic uncertainty surrounding the ongoing Brexit -Crisis.
This, according to the report, leads to a decline in purchases of large-ticket items such as cars, with registrations decreasing in 2017, 2018 and January to May 2019.
Nevertheless, online retail sales continue to grow from 4.2% in January 2008 to 18.2% in June 2019. This trend is likely to continue over the next few years, which further aggravates the difficult conditions for retailers. It is also worrying that rising wages, higher fuel costs and more difficult access to credit will cause long-term problems for retailers.
Despite these challenges, the number of retail liquidations declined in the second quarter. Compared to 2018, the numbers decreased by 6.8%, while the number of liquidations decreased by 10.7% compared to the first quarter.
This comes after strong growth in the previous quarters. Although retail liquidation currently accounts for less than one-tenth of all corporate liquidation in the UK (382 out of 4,115), they have attracted much media attention, such as House of Fraser and Debenhams reporting further financial problems that eventually led to the beginning of April 2019 in the administration.
This in turn affects consumer confidence. Immediate payments to suppliers and retail partners came in at 36.6% in the second quarter, compared to 35.5% in the first quarter. This means a slight increase in on-time payments as retailers are working to repay outstanding loans in order to be prepared for the effects of bad business. Deal Brexit.
Mark Kuger, chief economist at Dun & Bradstreet, comments on the report: "Given the challenging retail environment, we recommend keeping a close eye on the retail sector: it's still under a lot of stress as consumer patterns change. Supply chains could be threatened by Brexit become. Although recent July ONS results show a slight increase in sales, the overall picture is that sales are down year-on-year as consumer confidence continues to decline. Another by-product of the decline of the main road is that landlords of commercial real estate could have an uncertain future, as the excess supply of retail space in inner cities could potentially lower rents in the medium term. Ultimately, many of these concerns will persist through and possibly beyond October, until Britain has clarity on Brexit. "