Retail health in the first quarter of 2019 deteriorated further as a result of wavering demand, increasingly squeezed margins and ever-higher costs for retailers.
So says the latest KPMG/Ipsos Retail Think Tank (RTT) research, which brings its latest retail health index (RHI) score to 77 – only just one point above the historic-low of 76, recorded during the double-dip recession of 2012/13.
Looking ahead to the second quarter, the retail think tank members were a little more optimistic, pointing to the later occurrence of Easter, brighter weather, as well as the delay of Brexit and subsequent impact on the consumer’s psyche. However, while the quarter holds more promise, the RTT predicts that health will, at best, only flat-line due to increased cost to retailers – holding the RHI score at 77.
Commenting on the overall health of retail currently, Dr. Tim Denison, co-chair of the RTT and head of retail intelligence at Ipsos Retail, says: “The remorseless strain on retailers continued in quarter one, culminating in yet more casualties on the high street. All three drivers – demand, margins and cost continued to put downward pressure on retail health.”
Paul Martin, co-chair and UK head of retail at KPMG, adds: “The Easter sunshine will surely have provided many retailers with a positive start to the second quarter of 2019. However, while some measures may suggest that this has indeed been the case, retailers cannot hide from the continuing consumer uncertainty and importantly, the ongoing structural changes within the sector which remain a key driver of instability”.