Retail Survivors Unveiled in BDO/Verdict 'Survivability Index'

‘With retail consumer expenditure at its most modest level of any decade since the 1960s', and as the high street continues to bear the brunt of an imminent recession, accountants and business advisors BDO, in partnership with Verdict Research, have revealed the ‘Survivability Index’, which ranks how a cross section of UK retailers are best placed to insulate themselves in the long-term.

While retail giant Tesco tops the Index of ones to watch, a host of smaller companies also fare well including Boden, which ranks second and active clothing company Howies which ranks sixth.

BDO/ Verdict’s Survivability Index (Top Ten) –

1)      Tesco

2)      Boden

3)      Selfridges

4)      Apple Store

5)      John Lewis

6)      Howies

7)      Waitrose

8)      Sainsburys

9)      TMLewin

10)     Fat Face

With BDO and Verdict predicting that,  ‘Retail’s share of consumer spending will decline further to 31 per cent by 2012 translating to a loss to retail of £19.4bn in 2010’ a cross section of retail players ranging from large multi-nationals to small owner-managed businesses were reviewed.

Each retailer was measured against 10 key criteria, which the two retail experts believe could help them ride out the current economic storm and beyond. ‘Survivor’ criteria, identified in the forthcoming report ‘Surviving the Downturn’, includes branding, cost management, internet potential, product segmentation, customer targeting, defending share and diversification. 

Rupert Eastell, BDO’s Head of Retail and a mid-market retail specialist, comments:  “In the current climate where Britons have become, by default, a nation of bankers, it is vital that we preserve our heritage as a nation of shopkeepers. As we worked with Verdict to research our report, we were struck by just how many retailers were not particularly adept at proactively selling in a slowdown, where successfully targeting a wants-driven customer base requires a very different model. Today’s consumers certainly do not need to buy much more so the task for retailers is to inspire people to ‘want’ things.”

Continues Eastell, “Our report ‘Surviving the Downturn’ highlights those retailers that are better placed not only to weather the storm but be successful longer term as they score highly in what we believe to be the 10 key criteria for retail success.

"We forecast online spend to grow by 23 per cent year on year until 2012, so it is no coincidence that, amongst other things, both Boden and Howies have a strong web presence and high levels of customer loyalty, which could help protect their businesses in the current climate.

 “Of course there are no easy wins, and everyone will struggle to an extent, however, retailers that think beyond cutting costs and look at wider strategies to defend their top lines and market shares, will be better placed over the next 12 months.”

Included in the report is the recommendation that retailers go back to basics, as Eastell explains: 
 
“Retailers need to review all aspects of their proposition from what they sell, where and how they sell it, and have a clear understanding of their customer. For example, some locations will be more affected by the downturn than others, so retailers will need to flex their format to cope with difference in local demand. They also need to consider the break down and segment their product ranges.

"Those who implement strategies to react appropriately to changing circumstances will be the ones who emerge in the strongest position from the current difficulties. It simply isn’t just about blind cost cutting anymore.”

Neil Saunders, Consulting Director at Verdict said: “We are now entering the most challenging period many retailers will have ever faced: the UK retail market is both mature and intensively competitive and that, combined with a slowdown in growth, means everyone will need to work much harder just to stand still. Those that emerge from the present difficulties in the strongest position will be the players that have superior focus and exceptional execution. Being good will no longer be good enough to generate growth, retailers that want to increase their sales will have to excel in every way."

ENDS

Call Niki Wheeler at Launch Group on 0207 758 3913/ 07941 847 390 or Siobhan Murphy at BDO on 0161 833 8324/ 07800 682841