With all the uncertainty surrounding the UK economy at the moment it still doesn’t come as much of a surprise that retail sales on our high street this year are set to blow all previous records out of the water.
According to market analysis conducted by Deloitte earlier this month, consumers will spend a staggering £42.8bn this Christmas – over £1.6bn more than they did last year.
The forecasts account for a number of factors that will lead to a bumper Christmas for retailers including the fact that Christmas day falls on a Sunday this year, meaning consumers will have Saturday 24th to do last minute shopping.
As with previous years, online sales will see the biggest area of growth as the nation continues to turn to the internet and the world of click and collect to buy gifts for their loved ones. Over £7bn will be spent online this Christmas.
So what might 2017 hold for businesses on our high street. Here’s a few pointers:
Brexit – the number one thing on everyone’s mind is what will happen once Article 50 is triggered and how the UK economy might react. The most immediate and tangible impact has been the fall in sterling which has pushed up import costs.
National Minimum Wage – In April 2016 the National Minimum Wage was announced and at £7.20 per hour many retailers were able to absorb any new cost. The Government’s target of increasing that to £9.00 per hour by 2020 still remains and this undoubtedly adds significant new strain to those with already mounting overheads.
Interest Rates – Now at a record low of 0.25% the Bank of England does appear to be trying to ward off any prospect of a new recession. This is good news for retailers as consumers are encouraged to spend more and save less.
Business rates, rent and leases – A major threat to small businesses and one of the biggest overheads of any retailer, business rate increases were announced in 2016 and will come into force in April 2017. Whilst there are plans to soften the blow, the way retailers manage their properties and outlets must be top of their agenda.
The rise of technology – With the continued trend of buying online and mobile technologies, the consumer has access to more choice, more convenience and products that are cheaper. The best high street retailers must rise to the challenge to survive and providing quality in consumer care and service is seen as critical to their success.
Rix & Kay work in partnership with many retailers and businesses, helping them to grow. For more information on any of the above or to discuss the challenges your business might be facing contact one of our team or email email@example.com