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Retail health at 'record low'

Retail health in the final quarter of 2019 reached a “record low”, the KPMG/Ipsos Retail Think Tank has reported.

The retail health index figures dropped to 74, down from 75 in the third quarter of the year.

The think tank said wavering consumer demand and thin margins were key areas for concern, with demand not rebounding enough in the golden quarter despite a conclusive general election result.

The later timing of Black Friday and Cyber Monday also applied additional pressure to margins.

“A mere glance at recent Christmas trading reports and accompanying media headlines confirms that the final quarter of 2019 was a real mixed bag as far as retail performance is concerned,” said retail analyst Nick Bubb.

“The latest BRC-KPMG retail sales monitor revealed that total sales declined 0.9% year on year, if looking at November and December 2019 combined. Moreover, even online sales were notably lacklustre, with growth of only 2.6% in November and December 2019, despite an increasing number of sales taking place online.”

Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance, said: “A degree of certainty has returned to retail though, given the decisive general election result. The industry still has many reasons to feel more optimistic – albeit with a pinch of caution thrown in for good measure.

“We have to acknowledge the fact that unemployment remains low; real wages have rebounded to pre-financial crisis levels; and consumer confidence has started to climb once again. The uptick in retail health might not come to fruition immediately, but certain categories are set to improve.”

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