Sales volatility hits UK’s independent retail industry

Their study, based upon the latest Office of National Statistics data, showed that small retailers recorded a 36 per cent difference in average sales between their best and worst performing months last year; making it the most volatile period in retail sales since 1990.

Commenting on the study Duncan Montgomery, Tax Partner at UK200Group member firm Whittingham Riddell, said: “Depending on the sector, many retailers and manufacturers have peaks and troughs in demand. Some sectors have now moved out of the high street, in a general move out of town to unmanned warehouses, with an electronic shop front and they have seen business pick up as a result. Perhaps surprisingly antiques and similar higher value retailers have remained, but those requiring large footprint products have gone from many high streets.

While zero hours contracts have been lambasted publicly they, or another form of them, can be helpful in ensuring casual labour can be properly managed to smooth the flow.

Diversifying a business to ensure that different business models and sectors are accommodated is the best way forward for many, doing proper seasonal analysis of products and margins to allow focus on what works is a necessity. For many businesses data sets you free and a proper business analysis report, say every three years, that does both a bottom up and a top down review, is a must to ensure the most effective use of resources.

Jonathan Russell, from ReesRussell said: “The retail customer is becoming increasingly canny and unpredictable. In part, this appears to be because the end consumer is still short of disposable income and many purchases are ‘need purchases’ as opposed to ‘want purchases’. This means that retailers who are not selling everyday consumables are experiencing volatility in their sales.

The competition now from on-line retailers is becoming less important, in part because most retailers have their own website presence to supplement their physical shops and price differentials are now not usually that significant.”