Insights: UK retail prospects for 2019
A leading retail think tank has predicted that the UK retail sector will struggle to grow in 2019, regardless of what happens with Brexit.
Members of the KPMG/Ipsos Retail Think Tank also highlighted the main challenges that retailers will need to overcome during the year.
The think tank said major issues in the sector will include changing consumer behaviour, the over-supply of bricks-and-mortar stores, high levels of legacy debt, regulatory and compliance costs, macro-economic and geopolitical challenges, and a lack of talent at the top of retail businesses to help deliver change.
Paul Martin, UK head of retail at KPMG, said: “It is too easy to point the finger at Brexit as the singular cause of all the woes in the industry. There is in fact a much wider array of forces at play currently. These forces have been gathering momentum for a number of years and are by no means new.”
The think tank also said that many factors, including Brexit and the health of the wider economy, will be out of a retailers’ control in 2019, but that “controlling the controllable” will provide the best chance of survival in the next 12 months.
Members of the think tank agreed that maintaining brand identity and delivering a clear and focused proposition to customers will remain critical to retailers’ success in 2019. It also said that click and collect still offers a number of untapped opportunities and that retailers could do more to integrate the service into the customer experience when shoppers collect their goods in-store.
The think tank also said it could envisage there being a slight correction back in favour of physical stores in 2019 as shoppers seek out more tangible experiences and awareness grows around the true cost of home delivery.
Despite ongoing challenges that could intensify further, members were optimistic about the future of those retailers who focus on key areas such as delivering growth, suppressing cost and boosting efficiency, putting the customer first, taking their staff on the transformation journey and building their brand and reputation.
Martin added: “2019 is forecast to be a turbulent year for retailers in the UK. Certain developments and events will sit beyond their control. But it is controlling the controllable, acknowledging the challenges and addressing these whilst proactively embracing the opportunity, which can deliver success.”
