Retailers Face Up To A Record Low

There is no getting away from it -- last year was a disaster for the high street. Several familiar names disappeared, and the only surprise for many is that no big names have hit the headlines for the wrong reason so far this year.

The middle to end of January is always the time when many retailers throw in the proverbial towel. After managing to keep the lights on until Christmas, it is always worthwhile getting rid of old stock in Boxing Day and January sales before realising that replenishing warehouses is simply no longer worth the effort.

This may sound downbeat, but the British Retail Consortium has announced that 2019 was its worst year for retailers since it began keeping records back in 1995.

If Black Friday and Christmas were supposed to give the high street a boost, they have been poorly billed and overhyped. Sales for November and December actually feel by nearly a full percentage point across the busy two-month period. The figures were brought together across the two months because they are both now clearly identifiable as Christmas shopping season. 

So with all the Brexit uncertainty in the air, sales went down last year after having risen in 2018 by 1.2%. That may have given retailers some hope, but another year of doom and gloom and political uncertainty in the headlines saw Brits spend less. The BRC is now hoping a favourable trade deal with the EU can be struck as soon as possible to give the public the confidence to open their purse strings again, once the January sales are over.

It may be a moot point, but this may not have been at the cost of the total number of goods bought. We may have bought roughly the same amount of 'stuff' but retailers have had to get in the habit of discounting stock throughout the year. 

Retailers face an uphill battle this year of getting people back in the habit of paying full price for goods, rather than waiting for a sales they have been trained to expect at regular intervals.

I do not envy them the task. We have a very unfair retail landscape where ecommerce providers can operate at a fraction of the cost of a high street retailer who is hit hard to by business rates that simply make it impossible for many to keep going. The BRC is already on record calling an extension to business rate relief promised last year as nothing more than a "sticking plaster."

So there is not much to offer here other than expect to hear some big names in trouble over the next few weeks as January sales prove nothing more than a last-ditch effort to get the month's wage bill.

It's not the most intuitive forecast, I have to say, because it happens every year but if you think of the names that went a year ago, just think how many will be joining them now things have got even worse. 

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