Sluggish growth figures were published today, reflecting an economy that continues weak and where there has been a significant rise in the number of retailers, including multichannel traders, going into administration.
The Office for National Statistics announced today that GDP grew by 0.2% in the second quarter. That compares with growth of 0.5% in the previous quarter. GDP in the service industries, which includes retail, fared slightly better with growth of 0.5%, the same level of growth as the construction industries. Output in manufacturing fell by 1.4%.
The figures come in the same week as analysis from business advisers Deloitte showed some 43 retailers went into administration in the second quarter of the year. That was a rise of 8% compared to the same time the previous year.
Household names among them included multichannel retailers Habitat, Oddbins and Focus DIY.
“The retail sector is going through a significant period of change with many companies buckling under the pressure of weakened consumer confidence and a sluggish economy,” said Lee Manning, Deloitte restructuring partner. “Whilst the overall increase in the number of retail failures this quarter is relatively small, we have seen a significant number of household names falling into administration. This signifies that the severity of retail distress is far greater than the absolute figures suggest.
“It is likely that consumer spending will continue to decline this year, as concerns continue to grow around high inflation, unemployment and reduced disposable income. It is difficult to see where the positive growth will come from in the next few months. Inflation has hit retailers hard in the second quarter and unfortunately we are likely to see retail administrations increase as the year goes on.”
