Retail analysts predict bleak Q2

Group warns against sector talking itself into a worse state.
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Despite first quarter trading conditions turning out better than predicted, the KPMG/SPSL Retail Think Tank warns the next quarter looks “bleaker”.

The panel has predicted the state of retail health will deteriorate further and at a faster rate in the second quarter, mainly due to a drop in demand, increasing pressures on margins and rising costs.

Vicky Redwood of Capital Economics said: “Overall, the tough start to the year looks set to become even more entrenched as we go forward into the second quarter. The RTT is predicting increasingly difficult conditions ahead with a significant further weakening of demand growth, margins under ever greater pressures and no respite in sight from increasing cost pressures.

“Demand is the most influential and this quarter’s strongest variable, so the RTT is keen to stress that although the situation is serious it’s certainly not yet critical and talking it down will help no-one, least of all retailers.”

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