High street retail – the state of the nation
Around this time of year, retailers on high streets and in city centres around the UK should be gearing up for the ‘golden quarter of trading’ which starts at the end of the month.
Shops should be stocking their shelves with sweets and costumes ahead of Halloween, others with fireworks prior to Bonfire Night on 5 November. Then the focus turns towards attracting lucrative festive footfall in the run-up to Christmas.
While that’s still the case for some, footfall was 9% lower in September as local lockdowns were rolled out and stimulus packages, such as Rishi’s meal deals, came to an end. Footfall is likely to decrease further as stricter restrictions affect a quarter of the UK population at the time of writing.
Retail parks vs high streets
The Government admits these are “challenging and uncertain times ” for retailers and it’s those without an online presence or onsite parking who are really struggling.
According to the British Retail Commission (BRC), retail parks are performing “significantly better than high streets and shopping centres”, possibly due to the prevalence of supermarkets and parking spaces.
High street footfall slumped by 37% year-on-year in September, while shopping centres only fared slightly better with the number of consumers down 36% over the same 12-month period.
Online retailers, however, are being encouraged by the Government to continue operating to enable consumers to access the goods they need at this time. They are likely to come out of the pandemic in far better shape.
What can retailers do?
Retail outlets which stayed open during lockdown, such as grocery shops or pharmacies, should be familiar with market fluctuations as consumers rush to secure essential goods.
Keeping an eye on that all-important R-rate in your local area should help you predict and manage market demand, while shoring up cash reserves for when the business dries up is always a wise idea.
For retail companies, employees could move around to help fill gaps and relieve overworked areas of the business. Creating a crisis communication plan to inform them at every turn should also be in place.
Now would also be a good time to talk to your suppliers to assess the potential risks, identify any indirect exposures, and ensure you have contingency plans up your sleeve.
Business rates cliff-edge?
An elephant in the room as far as many retailers are concerned surrounds business rates. In April 2021, the current 12-month relief is due to end and local authorities will recommence collecting this bricks-and-mortar tax.
The Government is consulting on extending this relief, possibly for another 12 months in light of the pandemic. However, I recommend retailers factor in any business rates payments for 2021/22 as part of a worse-case scenario.
If you are looking for help with budgeting and planning for 2021/22, call me on 07803 782100 or email me on email@example.com. I can create cashflow forecasts and review your business plan to prepare your retail business for all eventualities for the tax year ahead.