Very often the best indicators are the least sophisticated. The UK economy remains in a very fragile state – the clearest evidence of this can be seen as you walk down any High Street.
The rising number and popularity of charity shops tell underscore that many families are struggling whilst at the same time the latest results from Marks and Spencer the favourite chain for the over 40’s reporting a decline in pre-tax profits of 8% for the 6 months to October 1st compared to the same period last year. The company cited the “current challenging conditions”.
In previous years, many retailers factored in Christmas buying spree as part of their overall strategy but this year as consumers struggle with debt and job insecurity it is hard to imagine this consumer excess.
As the knock on effect percolate back down the chain many businesses will suffer. External factors by definition are difficult to handle but at the same time in-house disciplines can at least provide some insulation.
Cash-flow will be very difficult to manage over the next 2 months so as always strict governance of Debtor and inventory control will provide some measure of comfort.
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