Bira: ‘It’s been tough and it’s going to get tougher’ for independent retail businesses

An eighteen month run of rising sales for Britain’s small shops came to an end in the last three months of 2015, according to the findings of the British Independent Retailers Association (bira)’s sales monitor for Q4 2015.

Unseasonably warm weather, flooding, early and deep discounting, slipping footfall and an ‘internet Christmas’ (triggered in November by Black Friday), all contributed to the first quarterly drop in sales since early 2014.

The key shift that produced an overall average year-on-year decline of 2.35% was the reversal from six out of ten independent retail businesses seeing growth in earlier periods, to six out of ten finding less in the till in the crucial final quarter.

It was most marked in the reversal from Q3, where all eight areas surveyed by the monitor were on the up – while seven out of eight fell in Q4.

The north-east completed a welcome full year of growth, but the flood-hit north-west suffered a disastrous 8.5% drop in the Christmas quarter.

The story was less consistent across product sub-sectors, where furniture, floorcovering and bed retailers kept their heads above water (although on a sinking graph), as did gift and book shops.

But for department stores, fashion shops, DIY and cookshop retailers, the period saw good runs of growth earlier in the year submerged as all fell below zero.

One in five businesses increased sale time activity to boost takings, but one in four did less. Four in ten kept sale activity as before, while the remaining one in ten spent nothing in this area.

These results polarised confidence levels, with nearly one in ten businesses feeling ‘very confident’ about the year ahead (a third more than in Q3), but with one in twenty moving from ‘reasonable confidence’ to ‘anxiety’ – returning to levels seen in the first half of the year.

Bira commented: ‘Retailers are by nature optimistic – it’s in the blood – and this will stand them in good stead after a warm and soggy fourth quarter.

‘Their confidence has been dented but more retailers are optimistic than anxious, and this is going to be needed as they face more of the same in 2016 – along with a heavy load of costs delivered by the government as business rates, still unreformed, go up in April, just as the £1,500 per property discount is removed and the National Living Wage kicks in. Retailers will be counting on improved trade to pump up results. It has been tough and it’s going to get tougher.’

Some of the comments left on the survey site by independent cookshop and housewares respondents include:

*‘Same number of customers, just spending less, as many are concerned about the economic climate and general uncertainty’ (from a business in the south-east/London);

*‘Always fighting Amazon & co., although it has its advantages: you just have to guess the correct product to stock. It’s a sort of latching-on effect ie watch what’s selling’ (Scotland);

*’Warm wet weather killed seasonal sales and kept Christmas shoppers away from the high street. Footfall was definitely down’ (Midlands);

* ‘The wet weather kept shoppers away from the high street and the warmth effected our sales, as we did not sell any seasonal product’ (Wales);

 *’The ‘sales’ mentality is ruining retail’ (north-west).

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