CCR Magazine

You are here  :Home arrow News arrow Research: UK retail sector toughest in world and faces drop in consumer spending
Contact Us Newsletter Signup RSS Feeds

Latest News Headlines


Commercial Credit News


Research: UK retail sector toughest in world and faces drop in consumer spending PDF Print E-mail
Monday, 07 August 2017
The UK has been ranked as one of the world’s most challenging retail markets, according to Euler Hermes, the leading trade credit insurer.

The company’s latest economic insight, ‘Retail, disrupted: pressure and potential in the digital age’, ranked the UK sector along with the US, Germany and South Korea as the toughest for retailers in the global market. The report points to high levels of competition, rising discounter market share and surging online shopping spend.

The Euler Hermes Digital Risk Scorecard benchmarked the UK against 12 key retail markets on the intensity of external market forces on each country’s sector and the awareness and ability of companies to embrace digitalisation.

The findings reveal that retailers across the UK are under the greatest pressure to transform business models compared to the other countries included in the research. The UK was found to face the highest concentration of competition, discounter market share (10 per cent) and frequency of online shopping – 81 per cent of customers bought online in 2016, more than twice the European average.

Despite this challenge, the research found the UK to be well positioned to embrace digitalisation, scoring highest in the Index for awareness of digital challenges and logistical efficiency.

The report comes as the financial standing of British retailers deteriorated in 2016 after several years of continued improvement. Average net gearing ratio increased by 10pp to 66 per cent in the 12 months to December while average EBIT fell 1.4 per cent year-on-year to 5.6 per cent.

Ludovic Subran, chief economist, Euler Hermes, said: “It’s clear the UK’s retail sector has reached a pivotal moment. The increasing consumer demand for seamless, omni-channel shopping experiences, the growing cost of a digital presence and the need to continually reinvent the mobile customer journey means that traditional retailers must urgently rethink their business models. Many will soon face a stark choice between evolution and closing their doors.

“Although British businesses are aware of these challenges and have a greater potential to change compared with their global counterparts, an uncertain economic outlook is expected to weigh down on retail sales. Our forecasts expect inflation to rise by 2.5 per cent this year and a further 2.6 per cent in 2018 as Sterling continues to depreciate, stunting real consumption growth to 1.7 per cent in 2017 and 1.3 per cent next year. Against the backdrop of worsening macroeconomic prospects, Euler Hermes estimates the UK retail sector faces a medium risk level for non-payment.”

The survey draws on analysis from 1,500 Euler Hermes credit analysts and underwriters in 12 countries: Brazil, China, France, Germany, India, Italy, Japan, Russia, South Korea, Spain, the UK and the US.

 Forums International Ltd

Forums International Ltd

 Attendance at your first meeting is free of charge, and please quote reference 'CCR2016' to receive the special 10% discount off of your first annual subscription.

Find out more here.

latest issue

CCR Cover

The latest edition of CCR Magazine, the leading editorial publication in the UK credit industry, is out.

Read the latest issue online


CCR is the premier magazine for consumer and credit professionals. It provides an independent voice to the industry, breaking major news stories and running in-depth features.

As a magazine, it works with and campaigns on behalf of the credit industry to promote its importance as a centre of potential profit and business development to the wider business world.

Subscribe to CCR Magazine

CCR World Magazine


Providing information and analysis for thousands of senior credit professionals worldwide, every quarter.

Find out more

GTS Media Ltd
81 Cambridge Road

Registered in England No: 05483197