No Good News for UK Retail

The KPMG/Ipsos Retail Think Tank (RTT) has released its latest findings on the UK retail sector. After six quarters of consolidation, the UK retail sector fell back in the first quarter of 2017 through weakening demand, squeezed margins and rising costs. The retail health index is now predicted to fall again in the second quarter of the year, which would be the first time since 2012, that there would have been consecutive drops.

Rising costs are the main problem, as currency hedging unwinds and the next rise of the National Living Wage comes into effect. Discounting continued to be rife on the high street, especially in the non-food sector. Retailers struggled with demand, as the spending power of the consumer was limited, and a late Easter failed to deliver a jump in sales. Whilst it was not a disastrous quarter for the majority of retailers, the sector was still on a downward trend and retailers should be prepared for worse times ahead in the year.

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