Page 59 - HW November 2019
P. 59

global eyes
                                                         UK retail facing “double-dip” recession?
 FACING LITTLE TO no respite from a disastrous year, UK retail won’t be having a cool Yule if the latest forecasts are to be believed.
The KPMG/Ipsos Retail Think Tank (RTT) has determined that UK retailing’s health in the third quarter of 2019 has surpassed the historic low previously recorded in the final quarter of 2012, when the UK’s economy faced the so-called “double-dip recession”.
The sector having this year struggled with demand, margins and costs, RTT members unanimously agreed that the UK retail industry has faced a “prolonged decline of health” and that turmoil within the sector has been “unprecedented”.
Indeed, the RTT Health Index hasn’t moved in a positive direction since
Q4 2015, which the RTT attributes to “mainly legacy players grappling with the rapid rate of change”.
Looking ahead to the all-important final “golden quarter” of the calendar year, RTT members were in agreement that much hinged on the outcome of Brexit negotiations and, whatever the outcome, that demand in the final months of 2019 would “flat-line at best”.
Margins and costs would also continue on a negative trajectory, further pulling down the RTT’s prediction for health in the final quarter.
Dr Tim Denison, RTT Co-Chair and Head of Retail Intelligence at Ipsos Retail Performance, says of this bleak outlook: “The third quarter of 2019 was a desperate period for many retailers – especially if looking at the BRC-KPMG Retail Sales Monitor, which revealed
drastic lows throughout.
“Such consistent retraction in growth
and lacklustre sales across consecutive months is quite unusual and paints a bleak picture of ill-health plaguing a large proportion of the industry.
“Even online sales were markedly down and many retailers – once celebrated for bucking the downward trend – found themselves in hot water.”
For non-food retail categories, there was “little deviation away from growing evidence to suggest that consumers are less and less interested in buying new products. Fashion really struggled to win over consumers, with new collections often discounted from launch to get stock moving.
“This approach is clearly detrimental to retailer margins, and against a backdrop over ever-increasing costs, many players will now be desperate
to make up for lost ground in the final months of the year.”
As retailers approach this “make-or- break” period, Paul Martin, Co-Chair of the RTT and UK Head of Retail at KPMG, makes no bones when he says he thinks most retailers will “likely flat-line at best. There will be those that can buck this trend of course, but that success will pivot on an ability to turn these adverse trading conditions into an advantage. That’s something legacy players continue to struggle with currently.”
One of these struggling “legacy” retailers is John Lewis Partnership. Seeourstoryonpage58astohowitis addressing this clear and present danger.
movers & shakers
European DIY giant Kingfisher Plc has made several key appointments in the last few weeks.
Dutch national Bernard Bot is the new Chief Financial Officer (CFO). He joins the home improvement group from Travelport Worldwide, a global technology platform for the travel industry. Prior to that, he was CFO of Aer Lingus and held various positions at TNT Express NV.
With the new appointment, John Wartig, who joined Kingfisher as
interim CFO, moves to the new role of Chief Transformation & Development Officer. He remains on the Group Executive team, with direct responsibility for transformation, IT, business development and property, reporting to CEO, Thierry Garnier.
Kingfisher also recently revealed Alain Rabec as CEO of Kingfisher France, which includes the Castorama and Brico Dépôt businesses.
Taking over this difficult territory
from current CEO of Kingfisher France, Christian Mazauric, the new boss is responsible for 200+ stores, 20,000 staff and €4.5 billion of sales and comes to the role armed with 30 years in senior roles at French retail group Carrefour.

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