Though you might think that a national event such as the Olympics would bring a big boost to retailers, new figures have shown this is not the case. Retailers in the UK have posted an unexpected drop in sales during August – this will be bad news for everyone from small suppliers to the government, not to mention the shops themselves. It seems that bigger factors, such as rising prices, tax increases and high unemployment are damaging spending power, resulting in fewer sales. This impacts on those SMEs who supply retailers with their goods – after all, if customers aren’t buying, paying suppliers is going to take a back seat.
Though July had shown unexpected growth following an upwards revision to figures in June, the August drop came as quite a surprise as it had seemed that retailers were on firmer footing than previously estimated. However, a survey by the business lobby CBI showed that retailers were taking the gloomiest view of their business since February 2009 – the height of the financial crisis.
The Olympics might have triggered nationwide celebrations, but this did not extend to high streets up and down the country. Though retailers are expecting the situation to worsen further over the next three months, it is still expected that sales in September will post a year on year rise. Department stores and recreational goods retailers fared the worst in August, whereas furniture, carpet, shoe and leather shops fared the best.
Many of the big retailers have been hit and this in turn has implications down the food chain. If your small business supplies any large retailers with goods or services, you might find payments being delayed or even a decrease in orders. In these cases, you can use invoice factoring to unlock the capital tied up in unpaid invoices helping you to make sure your cash flow is as healthy as possible, even when your customers might be experiencing the opposite.