An overwhelming majority of retail sector financial directors expect their business to grow over the next 12 months, according to new findings1 from the Royal Bank of Scotland Corporate amp; Institutional Banking (RBS CIB) and accountancy firm BDO.
Four in five (80%) financial directors polled said they expect growth in the year ahead, with more than one third (35%) believing that it will grow “significantly”. The research supports recent government figures which show that the UK retail sector grew by 1.7% in Q4 2012, its highest quarterly growth rate since 20102.
Nearly three quarters (74%) of those polled said they expect consumer spending to increase over the next five years, with 50% expecting prime growth to come from overseas sales, followed by online sales (41%). Traditional forms of retail and business transaction scored significantly lower, with just 6% expecting primary growth to come from high street sales and 3% from M amp;A. No financial directors expected the main growth to come from shopping centres.
Ben Williams, director retail amp; wholesale at RBS CIB said: “It is heartening to see that retail financial directors are bullish on the prospects of the industry over the coming year as the UK economy battles its way out of recession. As the largest sectorial employer, with 15.3%2 of the British workforce, the industry has an important role to play. In addition, the retail sector is one which is ripe for innovation, and we are confident that the coming years will see some exciting new developments, with retailers extending their business online and abroad.”
The retail sector is the largest employer in Britain, with a total of 4.2 million people in 20112. Last year, it was responsible for 11.3% of the UK’s total economic output, or £152 billion2. The sector attracts more than one third of consumer spending3, meaning that its health is closely linked to the UK economy as a whole.
Sources: 1 Research carried out among 35 Financial Directors at an event held by RBS CIB and BDO in April 2013. 2 The Retail Industry, Chris Rhodes, Standard note: SN/EP/06186 3 British Retail Consortium