It’s been great to see an uptick in consumer demand over the past 6 weeks or so. This follows a torrid period since midway through last year. 2018 softened as the year unfolded. Christmas really was as bad as feared and the industry entered 2019 with far less cash than it wanted, and in many cases, needed.
This reality has been reflected in growing distress, with casualties of one form or another up year on year. Admins, pre-packs, CVAs and programmes to reduce staff and stores have become the staple diet of retail news. Throw in some M&A that is much more corporate than strategically coherent and chaos seems to describe today’s retail landscape.
So the recent better figures have been especially welcome. Many may be sucked into thinking that the worst is over and “normal” service has resumed. We are still very much in the woods of very soft demand, oversuppy a cautious consumer all too ready to delay, and often postpone, purchasing.
Last years “beast from the east” made for some spectacularly weak comps. Very moderate demand looked like strong growth on the back some wonderful Spring weather. The timing of Easter coming later also boosted spending. Don’t be fooled. Underlying structural weakness cannot be solved with a few weeks of better sales figures which cannot be sustained. This remains a chronically oversupplied industry and only large-scale closures can deliver the much-needed reset of supply and demand. Until then, we will continue to see the results of deteriorating trading economics.
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