What these statistics can tell us about the economy

The British Retail Consortium trade body (BRC) which tracks all UK retail activity said that total sales for 2019 fell by 0.1% which was the first decline in 24 years and the lowest total amount of sales since 1995. 

BRC Chief Executive Helen Dickinson said that this was further reflected in job losses, shop closures and company restructurings that hit the industry last year along with continuingly weak consumer demand. 

There’s usually one event that encapsulates the mood and more or less sums it up and looking at the trading results for the largest retailers in 2019 and their performance over the traditionally busy festive season it could be provided by John Lewis potentially not paying staff their annual bonus. 

The 81,000 employees usually share in the rewards of the mutual company’s profits with the last suspension coming during the Second World War some 67 years ago. 

The decision will be officially made next month but with group sales falling by 1.8% over the Christmas period the signs look ominous. Last year the bonus level was reduced to 3% of annual pay which itself was the lowest total received for 66 years.

The disappointing performance has already cost managing director Paula Nickolds her job as she will leave next month as part of a management restructure.

Waitrose supermarkets, which are part of the John Lewis group, increased their sales by 0.4% but the John Lewis branded department stores lost 2% overall. 

They aren’t alone in suffering a bleak holiday period. Marks & Spencer saw their UK sales drop by 0.6%, Sainsbury’s fell by 0.7% and Morrisons fared worst of all with a 1.7% decline. 

Lack of sales and more

It’s not just a lack of sales. There’s broader societal forces at work too with a conscious move towards less consumption. 

More people are renting their homes and leasing their vehicles as opposed to buying them outright and the “less stuff” movement is gaining momentum with several prominent people declaring that in 2020 they will not be buying any new clothes, accessories or items unless they are to legitimately replace worn out or broken items. 

Barclaycard confirms that the trend is accelerating with cinema ticket sales rising 19% last month, takeaway food orders growing 12.5% and spending in pubs rising 11.7% while spending on clothes, toys and video games all contracted. 

Taken together, 2019 was truly an annus horribilis for the retail industry. 

Over 140,000 staff lost their jobs and thousands of stores closed as several well known brands such as Karen Millen and Jamie’s Italian closed for good while several others including Debenhams closed their doors as part of wider restructuring and recovery plans. 

According to the Local Data Company (LDC), some 12% of all UK stores remain empty which has increased from 11.5% a year ago. Their lead analyst Ronald Nyakairu expects 2020 to be a similar story as retailers look to consolidate into fewer, bigger sites to combat the inexorable rise of online shopping. 

He said: “Retailers are centralising – where they can have just one city centre store that serves a whole metropolitan area, they will”. 

We’re only at the beginning of 2020 but if it’s already shaping up to be as horribilis as the last then you should get in touch with us soon.

One of our experienced, expert advisors will arrange a mutually convenient consultation to discuss your options based on the unique circumstances your business faces. 

We can advise on what choices you can make right now to support your company’s viability and how they can support beneficial short and medium term strategies.  

You’ll never have more options and room for maneuver than you do right now so contact us before your window of opportunity starts to shrink.