Independents Feeling the Worst of the Downturn

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British Shops and Stores Association (bssa) has announced the latest set of results from its quarterly Sales Monitor, which shows clear evidence that independent retailers are feeling the effects of the downturn to a greater degree than multiples, with three month like-for-like sales down 1.83% compared with a BRC figure of down 0.03% for the same quarter this year.

With the exception of Scotland , only London and the SE showed positive sales performance in the last quarter. This reinforces the evidence of the BRC London sales monitor.

The survey also reveals that after a positive performance by Department stores in the previous quarter, performance has dipped to minus 5.5% in the last quarter.

‘It is of great concern that overall performance year to date is adverse by – 1.7% compared with last year,’ comments bssa Chief Executive, John Dean. ‘Superimpose above inflation increases in overheads and one can see the pressures many independent retailers face.’

Unlike the last quarter – January to March 2008 – where there was a definite market shakedown in effect, with clear winners and losers and very contrasting fortunes amongst different business types – only cards, crafts, stationery and hobby stores benefited from an increased performance this quarter, with books, toys and music stores faring particularly badly – down 7.5% – closely followed by department stores, but all other participating retailers experienced the same slump to a slightly lesser degree.

When comparing performance with the same quarter last year, 58% reported a drop at an average of -12.2% and it is the same story when it comes to performance for the financial year to date, compared with the same point last year. 55% of all respondents reported a lower performance with the same average decrease.

John Dean concludes:

‘Comments from respondents indicate that independent retailers are trying to counteract the effects of the downturn with deeper sales cuts impacting on margin. Store owners report that currency fluctuations are making trade difficult and unpredictable and that they are worried that increases in rents, wages, competition and ‘red tape’ encourages preparations for closure. Parking problems were also raised.

‘These results indicate the serious predicament independent retailers currently face. Despite the dangers of increasing inflation, there is a strong argument to drop bank rate to stimulate the economy in the short term.’

The Sales Monitor produced by bssa differs from the British Retail Consortium’s (BRC) Retail Sales Monitor in several ways. Calculated on a quarterly rather than monthly basis, it does not include sales returns from multiples or businesses operating in the food sector, thereby providing a more meaningful barometer to the current retail climate experienced by the mix of businesses on UK high streets.

For further information visit the bssa website at www.british-shops.co.uk or call 01295 712277.

Notes for editors:

  • bssa is the leading trade association to offer unrivalled support and commercial advantage to small and medium-sized non-food retailers. Today it has in excess of 4,000 members who have a combined annual turnover exceeding £3 billion, trading out of 6,200 outlets and employing over 45,000 staff.
  • Firmly proactive in its stance, in addition to commissioning qualitative research, bssa also produces an annual members’ Wages Survey as well as a quarterly Sales Monitor highlighting consumer spending and retail performance within the independent non-food sector. This service assists and supports its ongoing ‘Health of the High Street’ campaign.
  • The Association has two primary tasks. Its large membership base enables it to leverage economies of scale to provide a comprehensive and highly competitive portfolio of core retailing business and professional services to its members. These include web design and e-commerce solutions, card processing and banking, a property and ratings service and a comprehensive Legal Benefits Scheme, which includes access to essential online employment and health & safety sites as well as telephone advice lines. In addition, it represents the interests and concerns of its members to Government both directly and indirectly through the offices of the British Retail Consortium.
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