With a 12% decline in online Black Friday sales reported in the UK this year (Signifyd, 2023), our business recovery and insolvency experts share some financial advice for business owners in the retail industry this holiday season.
Recent research by commerce-protection provider Signifyd has revealed a sobering picture of the UK retail environment, reporting a 12% decline in online Black Friday sales this year compared to 2022.
This decrease in sales is grim but expected in the current economic climate, where high inflation and the ongoing cost-of-living crisis have lowered disposable income and consumer confidence.
The correlation between Black Friday and Christmas sales
Historically, strong sales for retailers on Black Friday have usually indicated successful Christmas sales. However, if Black Friday sales are weak, then it is likely that Christmas sales will also be disappointing. This year, with more than half of consumers (56%) planning to spend less over the festive period, the outlook for the retail industry seems bleak (Tink, 2023).
If you own a retail business, poor sales during the holiday season could be a sign of financial difficulties in the future. Your sales performance during this peak period has the potential to significantly impact your financial health, which makes it crucial to seek specialist advice as soon as possible if your business is struggling.
Financial advice for retail businesses
- Assess your financial situation – It is important to get an accurate representation of your financial situation, as this will inform future decision-making. Review your sales figures and compare to previous years, analyse your expenses to identify opportunities to cut costs and monitor your cash flow regularly to make sure you are making enough revenue to cover your expenses.
- Develop a recovery plan – To create an effective recovery plan, you first need to understand the reasons behind your poor sales performance, e.g. economic conditions, operational inefficiencies, lack of consumer interest in your current products etc. Once you have an idea of what is causing the issues, you can establish realistic goals to focus your recovery efforts. Creating a timeline outlining specific actions, timeframes and required resources will help keep you on track.
- Consider and action cost-saving measures – Can you renegotiate terms with your suppliers to get a better deal or consolidate suppliers to reduce your administrative costs? Are you able to cut back on any overhead expenses? Can you manage your inventory more efficiently to reduce stockouts and overstocking?
- Seek professional guidance – Speak to a business recovery and insolvency adviser with prior experience of working with retailers. They can provide you with more information on your options, from various recovery plans to insolvency measures, and guide you through the process.
Act now with business recovery advice from PKF Smith Cooper
Our business recovery experts and insolvency practitioners understand the unique challenges and opportunities faced by businesses in the retail industry, and we can help you navigate any financial difficulties with professionalism and understanding.
With specialist advice and support from PKF Smith Cooper, you can explore all your options for the future and decide on the best next steps for your business. The sooner you seek specialist support, the more recovery options you will have at your disposal. Contact us today for a confidential discussion with one of our team.