Thursday 16 January 2020 1:55 pm

Retail health hits record low in 2019

Retail health hit a record low last year as high street stores battled weak consumer demand and faced pressure to slash prices. 

The latest Retail Health Index published by a KPMG and Ipsos think tank hit a record low of 74 in 2019 – the worst result since the tracker was established in 2006.

The think tank – which assesses demand, margin and costs – said the “golden quarter” of Christmas trading did not rebound enough following a difficult year for the retail sector.

The later timing of Black Friday and Cyber Monday also put pressure on retailers’ margins, with businesses pushed into “aggressive discounting”.

Experts said the result of the general election did not spark the necessary boost in consumer confidence in December, but could have a positive effect this year.

However, the index score is expected to remain at the low of 74 in the first quarter of 2020. 

Independent retail analyst Nick Bubb said: “Even after the decisive result of the General Election result in December, the much-expected ‘Boris bounce’ failed to materialise and the consumer stayed cautious pre-Christmas.

“Black Friday and Cyber Monday were also later this year, which cannibalised trading in December and encouraged consumers to wait for more discounting.

“Retailers had little alternative but to discount aggressively to get stock moving – applying further pressure on margins. All in all, the final quarter of 2019 marked a disappointing end to what can only be described as an extremely challenging and turbulent year.”

Ipsos retail intelligence director Tim Denison added: The industry still has many reasons to feel more optimistic – albeit with a pinch of caution thrown in for good measure.”

“Consumers simply won’t want to start the New Year with the same downbeat mind-set they had in 2019, and neither will retailers,” he said.

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