Early warning indicators

 

Very often the best indicators are the least sophisticated. The UK retail sector remains in a very fragile state – the clearest evidence of this can be seen as you walk down any High Street.

The number of shoppers on UK High Streets fell last month, according to the British Retail Consortium (BRC).

Its latest monthly footfall monitor said shopper numbers declined 1.2% in December, compared with a year earlier.

The BRC data comes after official figures revealed that UK retail sales fell last month.

The Office for National Statistics said that sales in December were 0.1% lower than November, but clothing and food sales particularly struggled.

The BRC said that the decline for the month as a whole came despite a rise of 7.5% in shopper numbers in the immediate week before Christmas.

Helen Dickinson, director general of the BRC, said: "Weak spending power is keeping people away and compounding long-standing difficulties in many of our town centres.

"This month's retail failures confirm the challenges are far from over."

The rising number and popularity of charity shops tell underscore that many families are struggling. Consumers struggle with debt and job insecurity.

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 remain difficult to manage so as always strict governance of Debtor and inventory control will provide some measure of comfort.