Yorkshire Report 2014: A spring in the step of mid-market retailers

SINCE the start of the year the high street has continued its determined recovery, with figures revealing like-for-like sales growth among mid-market retailers.

Consumer confidence, underpinned by strong and sustained economic growth and increased ‘non-essential’ spending power is encouraging people to spend more on the high street. But challenges remain, especially at the larger end of the market. 

According to the BDO Yorkshire Report 2014, 17 of the region’s biggest companies are in the retail sector. 

Excluding Morrisons and Asda, which account for 45% of the group’s total turnover, the region’s biggest retailers have seen revenues fall by £1bn and employee numbers drop (to 34,500 from 38,600) over the previous reporting period. 

However there is good news too. Operating profits have increased by 13.6% and, having held their nerve on discounting, retailers have maintained operating profit margins.

Paul Davies, partner and head of audit at accountancy and business advisory firm BDO, said: “There seems to be a polarisation of two types in the retail sector.  Most notably during the recession we had the winners and losers, but now it appears we’re seeing a growing difference between the successes of mid-sized and larger firms.

“Although retailers of all sizes still face significant challenges, overall the year ahead looks promising. Better conversion rates, increased basket values and a rise in online spend are all contributing to an air of confidence that is encouraging retailers to hold firm on discounting, thereby protecting their margins.

“With increasingly favourable conditions returning, I’m confident that those that continue to adapt and move towards a fully integrated, multi-channel approach will perform well over the course of the next 12 months.”

The BDO Yorkshire Report 2014 cites children’s retailer Mamas & Papas of the one of the success stories of the year, entering the top 150 for the first time having increased turnover to almost £150m according to the most recent filed accounts.

For the full report, click here.  

 

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