The health of the UK retail industry is on the brink of falling to record lows as shops battle some of the “toughest trading conditions they’ve ever experienced”.
The Retail Health Index, which takes into account consumer demand, gross margins and costs, fell from 77 to 76 in the second quarter, financial services firm KPMG and Ipsos Retail Think Tank (RTT) said.
According to RTT, the index is expected to decline by a further point in the third quarter of the year, which would bring the score to an all-time low of 75.
The decline between April and June marks the 13th consecutive quarter in which the index has fallen or remained flat.
Consumer uncertainty in the face of a possible recession and Brexit uncertainty were the main causes of concern within the industry.
“Speaking with retailers day in, day out, there’s no denying that they are facing some of the toughest trading conditions they’ve ever experienced,” said James Lawley, Retail Think Tank member and head of retail and leisure at HSBC said.
He added: “Trading is challenging both on the high street and online – and apparel is very much on the forefront of this battle at the moment.
“There are a number of issues impacting consumer confidence and retailers margins are under significant pressure.
“Online sales growth was recorded at just five per cent growth for the last few months, so it’s not just the high street experiencing the strain.”