It’s been a difficult year for retail – or more accurately, another difficult year for retail. In this article we take a broad view of the economic landscape on Britain’s high streets and beyond
The Credit Crunch happened a decade ago, but it had such a devastating impact on so many businesses that it’s still a relatively clear memory for many – and though there’s been plenty of positive noises being made about the economy at various points since, it seems that today’s high street climate is no less brutal.
A recent article in the Guardian highlighted just how bad the situation has become, leading with the fact that the current reduction of shopper numbers is more significant than in 2009, during the deepest part of the recession. And you only have to keep an eye on the news to see household names reported in trouble, whether they’re negotiating CVAs, jettisoning staff or whole stores, or going under completely – Mothercare, Carpetright, Poundworld, Toys R Us, Maplin, New Look and House of Fraser have all hit the headlines in recent months.
The much-vaunted saviour of the British high street – the casual dining revolution – has also faltered. Whereas once we were being reassured that food would be the new leisure activity, and restaurants would be the answer to empty shops, reinvigorating city and town centres into vibrant places to be, the so-called ‘casual dining crunch’ has also been in the news. The financial troubles of Byron and Jamie’s Italian have been widely reported, as have the challenges felt by Strada and Prezzo, amongst others. The huge growth in this market – coinciding with a rise in the costs of food, staffing, rent and business rates – has left too many restaurants competing for too few customers, with margins squeezed beyond the realms of what the business can stand.
With consumer spending dropping almost every month – according to Visa’s consumer spending index, which recorded declines in all but one of the last 12 months – and footfall in retail parks, shopping centres and the high street down across the board, it’s a time for caution throughout the supply chain. Businesses will need to be savvy to weather the storm, with retailers careful to meet the exact needs of their target customers both in terms of offering and service, and suppliers operating with caution, taking all possible steps to protect themselves from risks such as unpaid invoices, as well as building the best possible relationships with their customers, ensuring that they can keep their finger on the pulse of the business’s ups and downs.
To find out more about our Credit Insurance and other risk mitigation solutions, and which might prove the best value for your business, please call Laura Prime on 01279 722555.