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2013 to be "another tough year", experts warn

Next year will bring yet more sluggish growth, with customers “reluctant to part with their cash”, retail experts have warned.

Macro issues such as the continued economic uncertainty, alongside the government’s austerity measures, will create “another tough year of trading”, according to the KPMG/Ipsos Retail Think Tank. The economy and consumers’ disposable income levels will be the main challenges facing the sector for the next 12 months.

David McCorquodale, head of retail at KPMG, said: “Austerity Britain is here to stay and 2013 will feel remarkably like 2012.

“The lack of economic growth and shaky consumer confidence will result in yet another year of deferred discretionary spend, especially for retailers selling big ticket items.”

The think tank, whose eight members include retail, property and economic analysts, said businesses would have to “develop innovative initiatives in order to drive sales”.

Martin Hayward, founder of Hayward Strategy and Futures, explained: “2013 will continue to be a daily battle for share of wallet, and deals, offers, coupons, and cash-back will remain a key fixture within marketing plans.”

Improved technology – particularly for consumers purchasing through smart devices – was identified as one of the most important areas for retailers to invest in and get right, with omnichannel platforms seen as the only area likely to experience growth. International expansion, using online as a test ground, would also help offset weak domestic growth.

The think tank also highlighted increased overheads, such as rising business rates, as being a major issue for retailers, recommending they “build a strong relationship with their financiers”.

McCorquodale said “an open dialogue between retailer, bank and credit insurer will be vital to survival.” 

Hayward added: “Despite the harsh economic environment, there is still plenty of consumer spend to fight for and most retailers will survive intact, leaving those who don’t understand the evolving price, value and service equation to flounder.”

Readers' comments (3)

  • I think many indies are going to be extremely frugal when it comes to forward orders for A/W12. Many are overstocked and will not be able to give large orders, so will the brands be sympathetic with the minimum requirements or will their heads still be in the clouds?

    2013 will be no better than 2012, no matter what anybody says.

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  • agreed, you can't decide how many customers come through your door,or website,but you can influence how much stock to buy,Indies will keep it very tight if they want to get through 2013.

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  • Thierry BAYLE

    Agree also.
    Please make sure you plan stock and sales + buy stock by product class and then by brand. Over half of retailers buy by brand only.
    Having an Open To Buy plan will help guide you HOW MUCH to buy and WHEN to bring the goods in.

    Buy by brand only and you will not help the business succeed in 2013.

    Get a regular flow of fresh goods throughout the 6 months and not just in Jan to March and from July to Sept.
    This is another reason to miss planned sales and having to give more discounts.

    Good luck.

    Thierry
    @retailfashion

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