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THE LATEST ELECTRICAL GOODS INDUSTRY NEWS
RETAILERS FACE £280 MILLION HIKE IN BUSINESS RATES
RETAIL SALES RECEIVE AUTUMN LIFT
The British Retail Consortium has warned that retailers are facing a £280 million rise in rates from next April as Retail Price Inflation has shot upwards due to rising food prices.
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he run up to autumn and the prospect of a new school term provided a welcome pickup in retail sales during August. Like-for-like sales increased by 1.3% year on year, while total sales grew 2.4% against a decline of 0.3% in August 2016, iven that the rate of inflation accelerated to 3.9% in which translated into the poorest performance of the year. August, September’s RPI is likely to be at least “Despite the ongoing challenges for the industry, 4% the BRC believes. The increase will push up retailers achieved reasonable growth in August, which business rates for retailers across the nation. “Nearly one is positive news for the industry. Even non-food Tom Ironside, Director of Business Regulation categories experienced an uptick – a welcome at the BRC, said: “It is highly questionable in every 10 shops relief given the poor performance recently,” said whether communities across the UK can currently lies vacant, afford a spike in business rates of this Don Williams, Retail Partner at KPMG. and those in economically Over the three months to August, like-for-like scale, and any resulting loss of commercial vulnerable communities sales of non-food products increased 0.6% and investment will contribute to fewer shops total sales rose 0.9%, above the 12-month total and fewer jobs. in particular remain average growth of 0.6%. “Nearly one in every 10 shops currently persistently empty, Chief Executive of the British Retail lies vacant, and those in economically limiting the chances Consortium Helen Dickinson noted however that vulnerable communities in particular remain non-food sales have only just recovered to the levels persistently empty, limiting the chances for for these places seen two years ago, after a dismal August in 2016. these places to thrive. to thrive.” Online sales of non-food products grew 11.0%, above “With the economy slowing, consumer spending both the 3-month and 12-month averages of 9.8% and facing headwinds, and retailers responding to 8.8% respectively, while the penetration rate increased from profound changes in shopping habits, the prospect of a 21.0% in August 2016 to 21.6%. further investment-sapping tax rise of this magnitude is deeply In the 3-month timeframe, in-store sales declined 1.4% on a worrying and will only serve to make life tougher for high streets.” total basis and 1.9% like-for-like. Ironside added that the Government should “knock on the head any notion of a bumper rise in rates next spring” and work with the retail industry and business to put the rates system on a more affordable and sustainable footing.
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RETAIL FOOTFALL DECLINES AS SHOPPERS HEAD ONLINE B
ricks & mortar retail received another blow in August as footfall dropped 1.2% against the previous year. High street footfall fell 2.6% following a 2.1% decline in July, while visitors to shopping centres fell by 0.8%. Retail parks again recorded a year-on-year increase, with a rise of 1.6%. According to Diane Wehrle, Springboard Marketing and Insights Director, at least part of the reason for the more subdued footfall was a rise in online activity, in terms of both value and volume. Online sales rose by 11% – the biggest rise this year and significantly up on the 6.2% last August
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SEPTEMBER 2017
and the 8.3% increase in July 2017. The uplift in online sales volumes, at 8.7%, was a third higher than the 5.5% recorded in July. “In part, the rise in online activity will have been a result of much cooler rainy weather this August than in 2016, which undoubtedly discouraged some shopping trips,” said Wehrle. “However, it is also a function of increasing inflationary pressures driving consumers online in a search for lower prices, which is likely to only become more significant as inflation continues to increase its bite on household budgets.”
UK CONSUMER CONFIDENCE GAINS TWO POINTS IN AUGUST
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onsumer confidence rallied in August following a downturn in July that matched 2016’s post-Brexit low. GfK’s Consumer Confidence Index increased two points to -10, with all five measures used to gauge public sentiment increasing. Joe Staton, Head of Market Dynamics at GfK, said: “We’re seeing an uptick in August among consumers when reviewing their personal financial situation for both the past and next 12 months, as well as a slight improvement in views about the general economic situation of the country as a whole.” Staton added that the figures must be seen against the backdrop of better news on inflation, public finances, jobs and growth prospects as the UK economy displays some signs of stability after a volatile start to the year. He acknowledged, however, that the Index has a lot of ground to regain to get back into the black. The major stumbling block for the UK is the measure for the general economic situation of the country. Although the index showed a rise of one point in consumer sentiment, both looking back over the last 12 months and forward over the coming 12 months, the measures stand at -30 and -27 respectively.