A leading think-tank has warned that the UK retail industry’s health declined in the second quarter of this year, and it expects it to drop further throughout the next.
The KPMG-Ipsos Retail Think Tank is expecting to see three quarters of consecutive decline as it reported that the country’s Retail Health Index, which started at 100 in April 2006, dropped from 82 to 81 in the second quarter.
If a third quarter of decline happens as expected, this would mark the “worst run of health in five years” as increasingly intense competition and rising costs of rates, wages and goods take their toll.
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“When looking at the retail sector over the past six months, the discounters and high-end retailers have delivered the best performance,” KPMG head of retail Paul Martin said.
“Prolonged discounting and crumbling demand have contributed significantly to the prediction that we are set for the worst run of retail health performance for five years.”
Despite the sunny weather throughout June boosting footfall, the report warns that the wavering economy and the end of retailers hedging period pulled down consumer confidence, effecting results.