UK's high street could face a “flurry of business failures” in the new year, stated industry experts as lack luster sales during festive period is expected to leave retailers low on the funds needed to cope after the festive season.
“We can expect more consolidation and high street casualties as we head into the new year. It will be yet another tough year for retail and a case of survival of the fittest,” The Guardian quoted Paul Martin, UK head of retail at KPMG, as saying.
In its monthly report, the Retail Think Tank, a partnership between KPMG and Ipsos, forecast the opening quarter of 2023 would be the most challenging of the year ahead.
The thinktank’s predictions come after the volume of retail sales unexpectedly fell in November as Black Friday discount deals and football’s World Cup failed to boost spending, with the cost of living crisis forcing households to cut budgets.
“Rising inflation, rising costs and flattened sales all took their toll on the health of the sector,” Martin said.
The amount spent on retail in Great Britain dropped by 0.4 per cent in November, against a forecast of a 0.3 per cent rise by industry analysts, according to the Office for National Statistics (ONS).
Online retailers suffered a 2.8 per cent fall in the amount sold as shoppers steered clear of Black Friday offers to focus on stocking up early on food and alcohol to spread out the cost of Christmas.
“The fact that not even the World Cup and Black Friday Christmas shopping could produce an increase in sales will come as a major disappointment to retailers, especially considering the increase last month,” said Lynda Petherick, the retail lead at Accenture UK and Ireland. “The festive season could well be the last hurrah for consumers as the new year will likely see them tightening their belts further, so retailers need to be doing all they can to make the most of this period.”
The KPMG and Ipsos Retail Think Tank stated that the new year was likely to be tough saying inflation had already meant there had not been the usual splurge in spending on groceries at this time of year.
“Despite inflation hitting lower income households the hardest, consumers across the board will become more considered with their spending as the year opens, which will have an impact on demand,” Joe Marshall at Ipsos said.
Seema Misra (L-4) and Vijay Parekh (L-5) receive Ramniklal Solanki Editor’s Award at the 2024 Asian Trader Awards 
