Increased turnover but slowed growth
Third quarter 2015 results shows an increase in turnover but continued slowing of growth for UK Independents despite more confidence
Growth slowed for independent retailers in the third quarter of 2015 - even as they recorded their fifth straight quarter of positive trading. More shops reported increased turnover than in any period since the survey began - but the average increases they reported were the lowest across the same period.
As a result reported sales growth fell back to its lowest level this year, to 1.33 per cent, from 2.35 per cent in the mid-year period. Six out of ten shops grew turnover, four out of ten lost out.
The attached report shows both geographical and sectoral comparisons. In the first Scotland and Wales led the way on growth. In the second Furniture, floorcoverings and beds once again headed the success stakes as this sector logged its fifth straight three-month period of rising sales.
As a result of this better spread of weaker growth, confidence levels among independents rose as anxiety fell. The latter, at one in four of members, is the best result since the crash.
Nevertheless more than half of respondents still predict that the result of the National Living Wage will be to reduce the numbers of jobs that they sustain, or the hours that they offer, by the time it breaches £9 an hour in 2020.
Four years' worth of compound 6 per cent increases will build pressure consistently on costs - so sales growth will need to far exceed these levels if retailers are to avoid cutting staff numbers or hours. Closer to hand, if the Chancellor does not renew the current temporary discounts, lower rates and exemptions on business rates in the Autumn Statement on November 25, small shops will suffer huge increases in costs as early as April next year.