// Large retailers expect to grow sales in next five years and more than half plan to create jobs, according to new report
// New technology and smarter use of customer data among routes to growth
// 2/5 of retailers plan to focus on improving the customer experience to help increase footfall
Almost three-quarters of retailers are forecasting a turnover increase over the next five years, according to a new report, bucking the declining trend plaguing the industry today.
Lloyds’ latest Business in Britain report revealed that 71 per cent of retailers anticipated an uptick in turnover in the next few years, while only 16 per cent expecting sales to decline.
The report also indicated that more than half of large retailers spoke of plans to grow their workforces.
A survey conducted for the report included 200 UK retailers with turnovers of £50 million or higher and more than half with annual sales of at least £500 million.
“We’ve seen plenty of evidence of bricks-and-mortar retailers acting to secure their futures, from talking to and negotiating with landlords to shutting stores,” Lloyds head of retail Philipp Gutzwiller said.
“It’s clear there is more of that to come but retailers recognise they cannot rely on cutting costs alone.
“The demands of UK shoppers, who are among the most sophisticated in the world, mean retailers must take a creative approach, ensuring the consumer experience continues to evolve at pace.”
According to the report, the UK’s largest retailers are positive in their efforts to grow sales despite the difficult trading environment and their own expectations of a weak UK economy.
Official data from the ONS showed a 3.7 per cent rise in sales values in the three months to the end of July compared to last year.
Meanwhile, bricks-and-mortar retailers have been trying to tackle the challenges of owning physical stores.
Fifty-five per cent said they have taken steps to reduce the cost of their store footprints, with rent negotiations the most popular option.
A third have closed locations in the past year and a similar amount expect to do the same next year.
One in five retailers have undertaken a CVA, an insolvency process agreed by creditors to try and reduce costs in the form of store closures, rent reductions or a restructure.
For multichannel retailers, the focus for boosting sales included using new technology, either in-store of via operations along with building customer loyalty and smarter use of customer data.
Some 83 per cent of retailers believed their business models were ready for the future or could be modified to stay successful.
Bricks-and-mortar retailers planned to keep shoppers coming in store by prioritising and improving customer experience, offering click-and-collect and holding in-store events.
These all came ahead of offering discounts.
Lloyds’ report also indicated that almost a third – 30 per cent – of retailers expect the UK economy to grow in the next year but more think it will shrink.
Amid this challenging environment and the impact of technological change on operating models, almost nine in 10 retailers believe the UK high street is in crisis.
“The challenging environment we hear retail CEOs refer to time and again is providing both threats and opportunities,” Gutzwiller said.
“Weak consumer sentiment, rising costs and intense competition are part of the perfect storm that has battered the sector recently – and these may be just some of the reasons why those in the industry are experiencing such testing times.
“Yet amid the pain felt, retailers are being pushed to think boldly and innovatively about their proposition to ensure they remain relevant and viable retail brands today and into the future.”