20 Apr 2014
It's no secret that the retail world has had a rocky few years. Ever since the now near-mythical global financial crash of 2008, consumers have been extremely wary about their spending, and retailers have been feeling the pinch. Even now, going on six years later, the average consumer is just beginning to regain their sense of confidence in their earning power, and the impact that their long slumber has had on the retail markets are still being calculated. However, the economy in the United Kingdom - in the retail sales sector, at least - seems to be slowly recovering itself.
After a strong holiday season at the end of 2013, when retailers experienced better than expected sales (partly due to the adoption of the 'Black Friday' shopping day pioneered in the United States), retailers found that January and February were still posting gains, but not the impressive numbers that they were hoping for. The economic outlook appeared to grow even more grim during March, when overall sales fell compared to February. It seemed like the tumbling sales figures would continue on into April, as economists who participated in a poll from news service Reuters indicated that they expected retail sales to fall nearly half a percentage point thanks to the Easter holidays, among other things.
In spite of this bleak outlook, however, the economy surprised the experts by not dropping retail sales at all, although the posted gain was so slight as to be almost non-existent, just 0.1% on the month. That leaves UK retailers with a growth of 4.2% on the year, according the Office for National Statistics. While this might seem relatively decent growth for a period following a severe economic downturn, economists had initially predicted growth for the year to reach 7% by this point in the year. Interestingly, all of this was happening at the same time as retail prices fell during the month of March.
While the forecast for the year might have been a hopelessly optimistic in terms of hard numbers, but economists are still predicting a year of robust economic growth for the UK economy, largely due to the fact that the housing market is stabilizing and strengthening, which tends to be one of the main drivers of consumer confidence - and by extension, of consumer spending habits.
