Gifts Today magazine

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Independent shops return to growth in first quarter, but confidence is knocked

Trading growth for independent shops returned to just the right side of zero over January, February and March, but confidence for the year ahead has taken a hit.

The British Independent Retailers Association (bira) revealed the “very finely balanced” figurer, with just 52 per cent of their members reporting increased turnover while the rest had logged declines, and they are wondering if the drop in confidence is due to uncertainty over the upcoming EU referendum.

The balance of growth was a tiny +0.53 per cent, but this was a big improvement on the last quarter of 2015 when 43 per cent gained, 57 per cent lost out giving an average drop of 2.35 per cent.

Bira’s Deputy CEO Michael Weedon said: “As industry sources have been reporting shop prices falling for nearly three years now – and by about 3 per cent a year – this is something of an achievement. And it comes against the background of High Street institutions British Home Stores and Austin Reed hitting serious trouble.”

The association’s results showed that of the 11 product sectors tracked, seven had lost out in the last quarter of 2015 but, in the opening part of 2016 the opposite was the case.

Seven sectors grew, including the cards and stationery category which was up 1.64 per cent against a two per cent-plus decline in each the previous three quarters, while gifts and glass continued the rise of the previous six months by showing 3.02 per cent growth, and books, toys and music completed a year of growth with a 4.7 per cent increase.

Of the eight regions covered, only the North East showed growth before Christmas with a strong 6.35 per cent increase, while in this last quarter Scotland (+0.15%), the Midlands (+0.56%), East Anglia (+0.39%) and the South East/London (+2.04%) joined the North East (+4.66%)in the black, leaving the South West (-0.75%), East Anglia (-1.06%) and the North West (-3.06%) still down.

Michael added: “What's odd is that, while results have improved, confidence has taken a hit and where only 30 per cent were anxious about the year ahead in January, 45 per cent are now. Is this generalised anxiety, or is it related to uncertainty about the EU referendum in June?”

Asked the official referendum question, 38.6 per cent of bira members said the UK should remain a member of the European Union, 39.9 per cent want to leave, while 28.5 per cent said they don’t know.

“So, more voted to remain than to leave,” Michael said, “but not by a decisive margin. Nearly three in 10 haven't made their minds up – which makes for a fascinating run-up to the big day on 23 June.

“One of the many comments on the subject summed up the difficulty for a lot of business owners ‘am still assessing the situation and trying to find any solid factual information to help me make a decision’.”

Bira members will have a second chance to express their opinions at the association's High Street Conference on 11 May when speakers from both campaigns including MP Chuka Umunna, will make the cases for and against, before members vote and the count is announced at the close of the event. Details of the conference can be found here.

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