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The reopening of the economy post-lockdown led to a rebound in sales for FTSE Retailers but warnings have been issued for challenges ahead, according to EY-Parthenon’s latest report.
It revealed most retailers experienced a successful Christmas trading period – data from the British Retail Consortium shows that non-food sales in December 2021 were 2.2% higher than 2019.
However, the firm said 34% of FTSE Retailers issued a warning in 2021 (21 warnings in total) with over 70% of sector warnings in H2 2021 coming from online retailers.
It said FTSE Retailers underlined the “increasingly evident structural change and uncertainty” that is causing many companies to delay or alter their investment decisions, with supply chain headwinds in the second half of the year also adding to these warnings.
Silvia Rindone, EY UK&I Retail lead, said: “We have yet to see any major wave of retail restructurings, but there are certainly retailers that would have failed in the last two years without government assistance – even in the absence of Covid-19.
“The end of the rent moratorium in March removes the final layer of government support and it will be interesting to see how the arbitration process plays out – and how other stakeholders react to any increase in sector distress.”
