BRC: No-deal Brexit presents more challenge for retailers

Despite total retail sales increasing by 1.3% in October, against an increase of 0.2% in October 2017, the head of the British Retail Consortium is warning that a “no-deal Brexit presents a huge challenge for retailers”.  

Helen Dickinson OBE, Chief-Executive of the British Retail Consortium has said ‘time is running out and it is essential that the Government, the EU and the UK Parliament come to an agreement on the backstop and delivers a Brexit deal detail which gives confidence to both consumers and retailers, and avoids squeezing real wages further.’

However, it is not just the prospect of Brexit that is affecting trade on our High Streets as consumer habits have changed and town centres must look at new ways of reinvigorating life into their communities.

“There is no point clinging to a sentimental vision of the past,” said Bill Grimsey, the former Wickes and Iceland chief executive who first looked at ways to revive the high street in an influential 2013 review.

“We have to accept that there is already too much retail space in the UK and that bricks and mortar retailing can no longer be the anchor for thriving high streets and town centres,” he said. “Town centres need to be repopulated as community hubs.”

Stockport is already addressing the ‘change in use’ of the town centre with plans to create more town centre living and more investment in the leisure sector designed to attract families and visitors looking for a more rounded experience. The recent rise in the number of  smaller independent retailers choosing Stockport as a location for business is indicative of the belief in a need for a ‘different retail’ offering.

The *BRC – KPMG sales monitor for October 2018 reports: 

• On a total basis, sales increased 1.3% in October, against an increase of 0.2% in October 2017. This is above the 3-month average of 1.1%, but below the 12-month average of 1.4%.
• In October, UK retail sales increased by 0.1% on a like-for-like basis from October 2017, when they had decreased 1.0% from the preceding year.
• Over the three months to October, In-store sales of Non-Food items declined 2.0% on a Total basis and 3.3% on a Like-for-like basis. This is above the 12-month Total average decline of 2.4%.
• Over the three months to October, Food sales increased 1.2% on a like-for-like basis and 2.3% on a total basis. This is below the 12-month Total average growth of 3.5%.
• Over the three-months to October, Non-Food retail sales in the UK decreased 1.0% on a like-for-like basis and increased 0.1% on a Total basis. This above the 12-month Total average decrease of 0.2%. October Non-Food sales saw growth for the first time in 4 months.
• Online sales of Non-Food products grew 7.6% in October, against a growth of 4.0% in October 2017, the lowest growth of 2017. This is above the 3-month and 12-month averages of 6.7% and 7.4% respectively. Online penetration rate increased from 25.7% to 27.6% in October 2018.

Paul Martin, Head of Retail, KPMG commented: 

“The Budget highlighted efforts to relieve some of the pressures on the high street, but didn’t go far enough to address the concerns of many retailers. With the potential implications of a hard Brexit added to the mix, retailers now need to juggle contingency planning alongside the busiest time of year.”

Food & Drink sector performance, Jon Woolven, Strategy and Innovation Director, IGD added:

“After a strong run earlier this year, food and grocery sales have settled into a new pattern of modest growth, broadly in line with inflation. The run up to Halloween delivered its usual boost, on a similar scale to previous years.

“At this critical stage in the Brexit process, shopper confidence is in the balance. The number expecting their personal finances to deteriorate has risen over the last month to 29% from 28%, but those anticipating higher food prices have fallen to 77% from 81%.”

Source: *BRC

Pictured – CGi of the new foodhall in Stockport

December opening for Stockport Market Place Produce Hall