The KPMG/Ipsos run Retail Think Tank believes the UK’s retail sector is on the road to improvement and has overall steadied in the second quarter.
Demand increased particularly in the end of June, positively impacting sales of goods. Three key segments, demand, margin and cost, which drive growth, were neutral, with demand slightly increased compared to the first quarter, margins still under some pressure, but with cost factors “largely negligible”.
The RTT’s Retail Health Index was marked at 78 points, one up from the previous quarter and the first successive growth since a continued decline in early 2011.
The group pointed to the arrival of the new governor of the Bank of England, Mark Carney, who said interest rates will stay low and should not mess with economic recovery.
David McCurquodale, head of retail at KMPG UK, said the picture is much brighter than last year.
“Compared to the carnage that occurred in 2012, this year we are seeing a far more settled picture which is a welcome sign for the retail industry,” McCurquodale said. “Certainly, there is less gloom, and expectations that retailers will enter into administration are lower, but for those sitting on large debts, there is still inevitably a risk of insolvency.”
