CBI says 2015 ‘was tough for retailers’

A tough year for retailers
A tough year for retailers
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Consumers have little to complain about following a year of rising disposable incomes and unprecedented discounting, but the story is significantly less positive for retailers.

The supermarket price war shows no sign of abating and consumers have now enjoyed more than 12 months of continually falling prices.

But they are pocketing the benefits rather than splashing out on substantially more grocery items, according to analysts Kantar Worldpanel, equating to £1.5bn taken out of the market in the last year - and saving each household £58 on average.

Shoppers have embraced a new order, turning in their droves to the discounters Aldi and Lidl, leaving a resurgent Sainsbury’s the only one of the major players to notch up a rise in sales in the most recent figures.

Aldi and Lidl are enjoying spectacular sales growth, now holding a 10 per cent share of the market between them, with their growing popularity driving prices down across the sector as the Big Four try to keep pace.

Elsewhere, consumers have adopted a steady diet of discounts which they show no sign of willingly giving up, with even major sales events such as Black Friday and Cyber Monday failing to draw large amounts of shoppers - who now consider money off to be the norm - on to the high street.

The CBI summed up 2015 by saying it was a tough year for retailers.

Barry Williams, the CBI’s distributive trades chairman, said retailers were expecting 2016 to start in “much the same vein”.

Its end-of-year survey showed the weakest expectations for business among retailers since May 2012.

The CBI has also warned that economic growth could be hit by increasing costs such as the new national living wage, reporting that a survey of 342 companies revealed concerns about rising labour costs because of the new £7.20 an hour wage rate from April and plans for an apprenticeship levy.

Costa Coffee and Premier Inn owner Whitbread has already said it cannot rule out price rises as it looks to offset the higher wage bill.

Richard Hyman, who has analysed the retail sector for more than 30 years, said 2015 had been the toughest year for retailers he had ever seen.