Recent data shows UK stores are having a rough time - sales dropped 5.8% compared to last year which hasnt been seen since the covid lockdowns. Sophie Michael from BDO says its a real problem for shops that are already worried about the new £7bn cost hit from Rachel Reevesʼs budget changes
The drop includes both web-shopping (down 7.8%) and in-store buying (down 5.5%). Fashion shops got hit extra-hard with an 8% fall; this is happening while stores try to deal with higher costs and less people buying stuff
The timing of black-friday sales this year (happening a week later than usual) didnt help but theres more to it: people are being extra-careful with money because of high energy-costs and bigger house-payments. Its creating a not-so-good mix of problems that makes shoppers think twice before spending
Business mood isnt great either - for the first time this year companies think things will get worse by early-25. Christmas job openings dropped to 21‚576 (down from last years 24‚699); big stores like M&S and Sainsburyʼs are looking at huge extra costs from new rules
These results are disastrous for the retail sector
In a try to help fix things NatWest is setting up a new group called the UK Mid Market Council. Paul Thwaite from NatWest says this will give medium-sized companies more say in how things work: “The mid-market can be an engine of growth for the economy; they need support to do that“