Independents retailers grew by an average of 2.35% in the second quarter of 2015, according to the latest quarterly survey by bira (British Independent Retailers Association).
This completes a full year of quarters of growth and is on a rising curve. Home-related sales saw strong growth for the big ticket items of furniture, floorcoverings and beds while housewares put in a second strong quarter, along with garden. The latter has now racked up two years’ positive results.
DIY and hardware moderated to growth of just over 1% but it has extended its run of growth quarters to seven. Only two product sectors suffered falls – fashion and gifts – and even these were only just the wrong side of zero.
Retailer anxiety is now at its lowest level since the beginning of 2014 as seven out of ten respondents are either confident or very confident of the year ahead.
Bira deputy ceo Michael Weedon commented: ‘Independents have already had to deal with a business rate increase of 2%, and unless the Chancellor repeats his discount of £1,500 next year, will see huge further increases.
“The National Minimum Wage (NMW) rises by an inflation busting 3% in October before the new National Living Wage (NLW) arrives in April, adding a further 7.4% on top of the October increase.
“Then they will really have to build turnover year after year just to keep in touch with government driven rates, as the target of £9 per hour by 2020 calls for four annual increases of 6% – and the NLW can be expected to follow that growth trend.
“That will be on top of the new requirement on all employers to pay an additional 3% in pension contributions as all of the small businesses meet their staging dates between now and 2017.
“In the light of those prospects, growth of just over 2% looks like a very bare minimum. And if the expected rise in interest rates occurs in early 2016, retailers could find life very difficult indeed, as eight million variable rate mortgage payers have to divert cash from spending to keeping the roofs over their heads.’