// Post-election certainty will bring boost to retail sector for 2020
// Non-food retailers will benefit from “turning point”
// However, numbers of restructuring and administrations still set to grow in year ahead
The UK’s retail sector can feel “cautiously optimistic” for 2020, according to a new report by the KPMG/Ipsos Retail Think Tank.
The sector is predicted to grow by at least one per cent this year, after what Retail Think Tank (RTT) described as “three and a half years of pain”.
READ MORE: Over 140,000 jobs have been lost this year
Perceived certainty in the UK after the general election on December 12 2019 will likely increase consumer confidence and provide a much-needed catalyst for consumer spending.
The RTT noted that non-food retailers that have adapted well over the tougher years “should now feel the benefits of a ‘turning point’ for the retail sector”.
While the RTT said it was cautiously optimistic that political stability will translate into improved sales on the high street in 2020, it stressed there are still plenty of unknowns to be confronted, including the obstacles around tariffs and trade deals for retailers to negotiate.
“The news of a governing party, with a comfortable majority and clear vision for Brexit, gives me hope that we will see a rebound in consumer confidence in 2020. The UK consumer may breathe a sigh of relief, the end of knife-edge votes and uncertainty should translate to a loosening of the purse strings,” said HSBC UK head of retail and leisure James Sawley.
Meanwhile it predicted weak food sales over the Christmas period are expected to set a precedent for what will be a difficult 2020 for supermarkets.
Looking ahead to 2020, the RTT also warned that “inefficient and irrelevant legacy retailers will continue to struggle in 2020”, with the number of re-structures and administrations predicted to increase on 2019.
“It is becoming increasingly clear that whilst the three key historic drivers of purchase decisions – value, convenience and experience – remain important, new factors are rapidly emerging. I would argue that a second lens of factors should now be considered, these being choice, purpose and privacy,” said KPMG head of retail Paul Martin.