Retailers steering through stormy seas

The UK’s retail sector continues to struggle as it faces the relentless onslaught from online companies, whose market share continues to rise.

At one stage it seemed that the market was polarising between the value and the luxury sectors, but with the recent collapse of Pound World it shows that no sector is immune.

It isn’t just the rise of the Amzons of the world (who make shopping oh so easy) that have caused the crisis on the high street, it is a combination of factors. There is a good reason why high streets around the country have so many charity shops: it is because they get an 80% rebate on their business rates (although there is a move to get the government to abolish business rate relief) and almost everyone that works in these shops are volunteers.

The cost of renting is an important factor in the demise of both independents and national chains, which is another major cost in the running of such businesses, along with the monthly wage bill.

With costs spiralling and incomes falling, it doesn’t take long before companies start running at a loss. A short-term loss can be managed, but if the losses start to escalate there is only one result: there is no business.

At Hart Shaw Business Recovery we have seen far too many businesses, including retailers, who think thet can ‘trade through’ their problems; they may put in personal savings (as Jamie Oliver had to do recently to save his Jamies Italian chain) and they may have to re-negotiate terms with their creditors to avoid bankruptcy.

Irrespecrtive of the business sector or the financial problem, the sooner the owners act the less they will lose. But, if they stick their heads in the sand and carry on regardless they will soon find out that there is nothing left to salvage and they will have lost everything.

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