Skip to content

Black Monday Is Followed by Bleak Retail News

Experts are still analysing the possible effects of the market meltdown on Black Monday. The worst day in the markets since the financial crisis saw share prices in London drop by 8%.

The coronavirus outbreak and falling oil prices are largely to blame for the nervousness in the global financial markets. However, what are the reasons for the poor retail news that has now come out?  

The Overall Picture

There is some good news in the UK retail market, as food delivery companies and digital subscription services have seen orders rise. On the other hand, more traditional ways of buying have become far less popular at the start of 2020. These numbers come from a Barclaycard report on the matter.

One of the headline figures is a 3.6% drop in department store sales in February. Meanwhile, the restaurant industry witnessed a 6.4% decline in sales. Clothing purchases fell by 1.7% in the same period.

The travel industry was also heavily affected even before the toughest travel restrictions were put in place in China and Italy. Travel agents reported a 0.3% drop and airlines fell by 0.7%. Nevertheless, it is almost certain that their numbers will be a lot worse in March. 

A different survey, from the British Retail Consortium, showed a 0.4% drop in sales at established stores in the month of February. The fashion sector was badly-hit, while they also reported a 1.8% drop in food sales at stores, but a 3.6% increase for online food sales.

At the other end of the scale, subscription TV services like Netflix have grown by 12.4%. Fast food sales have also risen, with an increase seen of 8.7%. The end of February saw food and healthcare sales increase, as people began to stockpile due to mounting worries over Coronavirus. 

What Are the Reasons for This?

It is clear the growing concerns over the Coronavirus outbreak have played a big part in this bleak time for retail businesses. People have been staying away from the High Street and from shopping centres due to fears about getting infected. The figures from March will show a further, significant downturn.

Ordering in food and watching on-demand streaming services is seen as being a safer option for millions of people just now. However, the Coronavirus issue isn’t the only factor that has seen this sector take a knock.

The storms at the start of the year also caused us to go out shopping less often. Storms Ciara, Dennis and Jorge all had an effect, even before the current Coronavirus scare took hold. 

What Happens Next?

In recent days, the possibility of severe travel restrictions and limits on public gatherings have added to concerns for the retail sector. It is possible that a month or more of low sales are to be expected. 

The big question is whether companies can withstand this period and stay afloat until everything gets back to normal. All of this bad news means that more businesses are turning to international commercial debt collection and other solutions.     

The issue of business rates remains a worry for the retail industry too. Retailers are still waiting to find out more details on the government’s manifesto pledge to review business rates.