Retail news round-up: ‘Hundreds of shopping centres could close’; sales & prices; Budget’s ‘missed opportunity’

More than 200 UK shopping centres, collectively worth around £7 billion, are at risk of closure if their owners fail to secure fresh equity for refinancing and ‘much-needed redevelopment’, according to asset management company APAM.

Retail sales growth slowed in the year to October, following four consecutive months of firm sales during the summer, according to the latest CBI Distributive Trades Survey of 104 firms, of which 45 were retailers. It also showed that sales volumes were significantly below average for the time of year. Orders placed with suppliers fell, but are expected to rebound in November, when retailers also expect sales growth to recover.

Following two months of mild inflation, shop prices were back in deflationary territory in October. Year-on-year prices have decreased 0.2%, compared to the 0.2% increase seen in September, according to the BRC-Nielsen Shop Price Index. Non-food inflation deepened in October to 1.1% from 0.9% in the previous month.

British Retail Consortium chief executive Helen Dickinson believes the Government has missed ‘a much-needed opportunity’ to help the retail industry in the Budget. ‘While we welcome measures to assist smaller retailers, the majority of the UK’s 3.1 million retail workers are employed in businesses that will not benefit from the business rates announcement,’ she says. (See Retail Reflections).

Landsec, one of Britain’s biggest listed property companies, is reported to be drawing up plans to build flats above and around its shopping centres in an attempt to counteract the pressure on retail property valuations.

Consumer champion Which? tracked the prices of 32 of the most popular makes and models of gadgets and appliances over a year and concluded there were ‘wildly’ fluctuating prices: if found ‘considerable’ variations in almost all cases, making it difficult for shoppers to assess the best deals.

Intu Properties has given a consortium led by the billionaire John Whittaker until 5pm on November 15 to table a formal offer for its shopping centres.

Joe Staton, client strategy director at Gfk, reports that the recent claims about the imminent end of austerity, and the good news of lower retail price inflation and accelerating wages growth ‘would normally be sufficient to boost consumer sentiment’. But its consumer confidence index slipped again in October, down one point to -10.

Staton adds: ‘The prospect of a no-deal/hard-deal Brexit must surely be weighing heavily on people’s minds … We also appear to be losing confidence that now is the right time to make major purchases. This will concern retailers in the run-up to Black Friday, Cyber Monday and the key Christmas trading period … With no immediate prospect of any feelgood news impacting our hearts, minds and wallets, the index is set for further declines.’

Alan Monahan