Steven Cook Former CEO of Debenhams
“This is certainly the most volatile market I have experienced in my career to date. “While some businesses at the upper end of the market are continuing to show a steady increase in sales, there remains a great deal of pressure on mid-sized businesses and the smaller end of the market. “The impact of inflation has significantly increased the price of food and packaged goods, while imported apparel and footwear have been less affected, for example.
“Alongside this, return rates are skyrocketing for digital businesses, fuelled by the growth in online shopping, and more consumers choosing to return goods shortly after purchase. “It’s fair to assume that consumers will seek bargain deals and offers this year, but retailers are already incredibly promotion-focused and they can only go so far. “They need to stay nimble and respond quickly to changes in the market. This includes being light on inventory to avoid becoming stuck with too much stock.
Ultimately, if a retailer is performing reasonably well during this challenging period, their resilience is likely to attract investor attention. Demand will inevitably return, and the investment landscape will evolve to match. “Conversely, a lot of retailers have left the market, so there are more sales going into fewer players than there were a few years ago. “This helps existing retailers as it reduces overcapacity in the market, and concentrates consumer spend. Whether this is enough to give the ones that remain an uplift though, remains to be seen.”
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