2019 saw UK retail suffer 25-year-low
A new industry report has found that Britain’s retail growth is currently enduring its worst performance since the 1990s. As dark clouds gather on the UK’s economic horizon, things seem unlikely to improve in 2020.
The UK’s retail scene has undeniably been in decline over the last few years. The high street’s footprint is decreasing, with the likes of Mothercare, Topshop, and Karen Millen among the latest in a long line of big fashion names to fall victim to the high street ‘curse’. The situation is so dire that British retail sales fell for the first time in 25 years during 2019, according to The British Retail Consortium (BRC). The industry organisation said total sales fell 0.1%, marking the first annual sales decline since 1995.
While research organisations continue to simply point fingers at the rise of e-commerce – customers now spend one in every £5 online – the reasons for this are a good deal more complex than most experts seem to be letting on. A potent blend of factors has sent the sector into a tail-spin since 2016 – factors which have also done something to stymie the explosive growth of online shopping as well. In May 2019, for example, sales of online retailers were hit by the worst growth on record.
Stagnant wages and a spiralling cost of living mean that many consumers in the UK currently earn less in real terms than they did a decade ago. At the same time, Britain’s faltering withdrawal from the European Union has destabilised the national currency, and the devalued pound does not go as far as it once did with imported goods as a result – ramping up prices, while customers have become increasingly reluctant to spend on anything approaching ‘luxury’ in anticipation of a recession.
Commenting on her organisation’s findings, Helen Dickinson, CEO of the BRC, said, "These figures are not an estimate, they are full sales data from retailers that represent the majority of retail sales. While it is not 100% of retailers in the country, some businesses that aren't included will also be compensated by those that have gone bust. Twice the UK faced the prospect of a no-deal Brexit… further weakening demand for the festive period. Retailers also faced challenges as consumers became both more cautious and more conscientious as they went about their Christmas shopping.”
The material conditions of UK society likely account for why a separate report from Barclaycard found a rise in consumer confidence had failed to boost festive spending. In fact, consumer spending growth has declined if inflation is taken into account, according to the firm which processes nearly half of all UK debit and credit transactions in Britain. That study also found that supermarket sales contracted by 0.9% in December, while sales at specialist retailers such as toys and gaming stores fell 4%.
