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Challenging market fails to hamper UK retailers’ outlook

71% of UK retailers with a turnover of £50m-plus expect to grow sales in the next five years, despite operating in a challenging trading environment.

Just 16% expect sales to decline.

Of the 200 businesses surveyed, a further 55% said they plan to grow their workforce during the same period.

New technology (39%), better use of customer data (26%) and building customer loyalty (25%) are among the most popular routes to growth.

Bricks and mortar retailers are meanwhile focusing on improving the customer experience (39%), offering click-and-collect (37%) and holding in-store events (35%). 33% will focus on discounting.

Despite their positive outlook, physical store owners have already been hit by the tough retail market - 34% have shut stores in the past year and 35% expect to do so in the next 12 months.

19% have undertaken a company voluntary arrangement (CVA).

This is according to Lloyds Bank’s latest Business in Britain report. Head of retail, Philipp Gutzwiller, said: “We’ve seen plenty of evidence of bricks and mortar retailers acting to secure their futures… It’s clear there is more of that to come but retailers recognise they cannot rely on cutting costs alone.

“The demands of UK shoppers mean retailers must take a creative approach, ensuring the consumer experience continues to evolve at pace.

“The challenging [retail] environment is providing both threats and opportunities. Weak consumer sentiment, rising costs and intense competition are part of the perfect storm that has battered the sector recently – and these may be just some of the reasons why those in the industry are experiencing such testing times.

“Yet amid the pain, retailers are being pushed to think boldly and innovatively about their proposition to ensure they remain relevant and viable retail brands today and into the future.”

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