Festive Trading Concerns: Survey Reveals Challenges for UK Fashion Retailers Amid Economic Uncertainty

As the holiday season approaches, a recent survey unveils the concerns of two-thirds of UK fashion retailers facing a challenging Golden Quarter. The survey highlights the impact of escalating interest rates and inflation, creating a ‘double-whammy’ effect that is expected to impact peak trading in the lead-up to Christmas.

With 14 consecutive interest rate hikes in the last two years, pushing the base rate to 5.25%, 41% of fashion retailers are planning to reduce festive stock. Conducted by Inventory Planner, a forecasting and planning software supplier, the survey sheds light on the broader economic challenges affecting the retail landscape.

Inflation compounds these challenges, with 59% of retailers choosing to lower margins instead of passing on the full cost of rising prices to customers. Balancing acts between market share concerns (61%) and accusations of ‘greedflation’ (60%) highlight the delicate pricing strategies retailers must navigate.

This year, Black Friday takes on added significance, with 67% of retailers planning discounts to navigate economic pressures. A consumer downturn over the last six months has left 65% of retailers with excess stock, a major concern for nearly half of sellers.

Cash flow management emerges as a critical issue, with 49% of retailers describing their cash flow position as ‘precarious,’ and 42% facing frequent cash flow challenges in 2023. Stock management challenges persist, with 45% of retailers writing off stock in the last year, and 41% struggling to buy the right amount of stock.

Despite these challenges, there’s a silver lining. While 41% of retailers faced stockouts in certain lines over the last six months, 75% of those affected reported revenue losses. As the industry navigates uncertainties, strategic inventory planning and adaptive pricing strategies become paramount for fashion retailers looking to weather the storm and thrive in a volatile market. Stay informed about the challenges shaping the future of UK fashion retail.

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