Uncertain outlook for the Retail sector
So, it’s official: the Bank of England has raised interest rates to 3%, the biggest single rate rise since 1989, amid reports that the UK faces its longest recession in 100 years. Growth looks set to fall across next year and beyond, as the Bank notes that ‘high energy prices and tighter financial conditions weigh on spending’.
ONS details drop in consumer spending
Recent data on retail spending from the Office for National Statistics (ONS) attests to the effects of the cost of living crisis. In September 2022, sales volumes fell by 1.4%, which is 1.3% below pre-pandemic levels (February 2020). The total retail sales may have been 12% higher in value terms, but 1.3% lower in volumes.
While the bank holiday for the Queen’s state funeral further affected these results due to many retailers closing on that day, there was more potentially worrying reading from the ONS about consumers feeling the pinch: in the three months to September 2022, sales volumes were down by 2% when compared to the previous three months. By contrast, in comparison with the same period one year prior, retail sales dropped by 5.4% in the three months to September 2022 (though sales values rose by 5.5%).
Recapping the year
In January 2022, I made a short video detailing some of the trends we’d noticed in Retail and Consumer Goods ahead of the new year, which were:
Consumers rethought their personal purpose after the pandemic
As a result, they began to change the way they bought, thinking of others ahead of themselves
There was particular growth in the commercial, digital, and customer experience and insights sectors
It would have been difficult to predict the level of tumult we saw this year. From the ongoing war in Ukraine, its effects on existing increases in energy prices and levels of inflation not seen in 40 years – not to mention the panic caused by Liz Truss’s mini-budget – one thing seems clear: the market is tough right now. We’ve noticed that firms are pausing on immediate hires, choosing instead to focus on internal promotions while doing all they can to push organic growth. Naturally, retailers are treating their business with caution at the moment, though there is still activity in certain areas – notably, delivery companies seem to be focusing on improving aspects such as pricing and relationships.
But despite the tricky outlook, it’s not all bad news for candidates
So, is it all doom and gloom for candidates in the Retail sector? Not by a long stretch. While the jobs market may be extra competitive at the moment as we continue to see the effects of the pandemic and the Great Resignation on recruitment, it is worth noting the above-mentioned ONS report’s findings on internet retail patterns: in September 2022, the value of online spending increased as retail sales as a whole fell. Non-store retailing has reported sales volumes that are 18% higher than pre-pandemic levels. But if a career in online retailing isn’t necessarily for you, there are always things you can do to stand out from the crowd – and, at Venari Partners, we’re only too happy to help with that.
I would advise anyone looking for new roles in Retail to be proactive in their approach. Don’t sit around waiting for the perfect job to appear on LinkedIn – use your network as much as you can to put feelers out. This applies to everyone, not just consultants; your contacts can open doors for you that may not be immediately apparent, from the inside tip on an unlisted job to an introduction to an all-important mutual connection. I may be somewhat biased here, but it goes without saying that you shouldn’t be afraid to involve recruiters in your search; see if they can bring the market to you!
Make sure your skills are being utilised, and avail of your company’s opportunities
Saying that, however, there are still things you can do alone to make yourself more competitive. One example is to keep an eye out for announcements on restructuring, alternative jobs, or settlement agreements from companies you follow. Remember that in times like these companies will look to maximise their existing talent; be certain to avail of any opportunities for advancement or extra training that you receive. Above all, make sure your skills are being utilised in your current role while you assess the market, and be prepared to go above and beyond your normal duties. Doing all you can to take on new responsibilities and making yourself indispensable to your present organisation will not only make you a more attractive candidate – if you do end up handing in your notice, you will also be more likely to receive a counteroffer (and have a better bargaining position from which to negotiate – more on that later).