High Street Struggles Continue as Online Sales Thrive
- Retail administrations increased by 6% in 2018 compared to 2017
- Large multi-site retail administration appointments rose from 17 to 26 in 2018
- CVAs increased across all industry sectors, including retail, by 18% in 2018
- Consumer confidence fell in Q3 2018 due to inflation-driven pressure on disposable incomes
- Online retailers accounted for a record 21.5% of UK retail sales in November
- Retailers face increasing staff and property costs, weaker Sterling, and a decline in footfall
The number of retailers entering administration in 2018 was 125, a 6% increase from 2017 according to Deloitte’s latest insolvency figures. Large multi-site retail administrations rose from 17 to 26, and CVAs increased by 52%, with 38 in 2018 compared to 25 in 2017. The total number of administrations across all sectors in England and Wales grew by 10% to 1,251 from 1,134 in 2017. CVAs increased by 18% across all industries, including retail, reaching 395 in 2018. Consumer confidence fell in Q3 2018 due to inflation-driven pressure on disposable incomes, leading to a decline in footfall and increased discounting by bricks and mortar retailers. Online retailers experienced growth, accounting for 21.5% of UK retail sales in November. Dan Butters, Deloitte’s restructuring services partner, predicts a challenging Q1 2019 as Christmas trading effects emerge.
Factuality Level: 10
Factuality Justification: The article provides accurate and objective information about the increase in retail insolvencies and CVAs in 2018, citing specific numbers from Deloitte’s research. It also offers insightful analysis on the factors contributing to this trend, such as consumer confidence, inflation, staff and property costs, and the performance of online retailers.
Noise Level: 3
Noise Justification: The article provides relevant information on the increase in retail insolvencies and CVAs in 2018, citing specific numbers and comparing them to previous years. It also offers insights into factors contributing to this trend such as consumer confidence, inflation, staff costs, property costs, and online retail growth. The article stays focused on the topic and supports its claims with data.
Financial Relevance: Yes
Financial Markets Impacted: Retail sector, specifically large multi-site retailers and online retailers
Financial Rating Justification: The article discusses an increase in retail insolvencies and CVAs, which directly impact the financial performance of these companies and can affect the overall market value. It also mentions the effect on consumer behavior and competition between bricks-and-mortar and online retailers.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: There is no extreme event mentioned in the text.
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