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Jul 24, 2019
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UK retail health could surpass historic lows, Retail Think Tank warns

Published
Jul 24, 2019

Retail health deteriorated more than expected in the second quarter of 2019, marking the thirteenth consecutive quarter in which the indicator has either declined or remained flat, announced Retail Think Tank this week.


British Land


In fact, the retail health index (RHI) score fell from 77 to 76 in the second quarter of the year, bringing overall health in line with the lows witnessed in the last quarter of 2012. 

British retail businesses are now bracing for a further decline, with the Retail Think Tank predicting that health will fall a further point in the third quarter of 2019. If their predictions come to fruition, this would bring the score to an all-time low of 75.

The study confirms the challenges facing British retailers as low consumer demand and continued margin pressure continue to hurting their ability to perform well in this prolonged state of uncertainty.

“Speaking with retailers day in, day out, there’s no denying that they are facing some of the toughest trading conditions they’ve ever experienced,” commented James Sawley, Retail Think Tank member and Head of Retail & Leisure at HSBC.

“Trading is challenging both on the high street and online – and apparel is very much on the forefront of this battle at the moment. There are a number of issues impacting consumer confidence and retailers margins are under significant pressure. Online sales growth was recorded at just 5% growth for the last few months, so it’s not just the high street experiencing the strain.”

Mike Watkins, RTT member and head of retailer and business insight at Nielsen, added: “From an economic perspective, consumers should be feeling more confident and flush in light of wage growth and low unemployment, but they are notably clawing back spend at the retail industry’s peril. 

“I believe retail as a whole faces some structural issues that may be amplified as we near the next Brexit deadline in October.”

The retail health index reflects the sentiments of RTT members on the health of demand, margins and costs, which are combined with a wide range of hard data sets to determine whether the state of health has improved or deteriorated.

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