UK retailers predict sales growth despite sector gloom
The UK’s largest retailers are confident of finding new ways to grow sales despite a “challenging” trading environment and their own expectations of a weak UK economy, according to a new report released today.
Lloyds Bank Commercial Banking’s latest Business in Britain report reveals that 71% of retailers are forecasting a turnover increase over the next five years, with only 16% expecting sales to decline. More than half (55%) of large retailers also plan to grow their workforces.
Findings from the survey of 200 UK retail businesses with a turnover of £50m or more – including more than half with annual sales of at least £500m – come at a time when retailers are experiencing difficult trading conditions.
Though official data showed a 3.7% rise in sales values in the three months to the end of July compared to the same period last year*, retailers continue to operate against a challenging environment. Grocery sales – seen as the most robust part of the sector – were flat in the 12 weeks to 11th August**.
Bricks-and-mortar headwinds
Retailers have been acting to tackle the challenges facing those with physical stores. More than half (55%) say they have taken steps to reduce the cost of their store footprints, with rent negotiations (43%) the most popular option.
A third (34%) have shut stores in the past year and a similar proportion (35%) expect to close shops in the next 12 months. One in five retailers (19%) has undertaken a company voluntary arrangement, an agreement with creditors with the aim of reducing costs.
