Customs Support’s Key Accounts Manager Samantha McClelland, a specialist in simplified declarations often utilised in the retail sector, discusses the challenges of the Golden Quarter and the latest high stakes on the High Street.
Retail businesses launched into the headwinds of 2025 with economic uncertainty, sluggish sales and zero growth as well as erratic and petulant policy posturing around tariffs. This has even extended to re-shaping the geopolitical map with the potential annexing of Greenland and the Panama Canal by the new administration in the White House.
The two things retailers hate – risk and uncertainty – both swept in on the tail winds of Storm Eowyn in January as businesses attempted to salvage what they could from the economic weather battering UK plc.
It is little wonder that the European Union has been cosying up to post Brexit Britain, its closest trading partner, after Sir Keir Starmer offered an olive branch to Brussels in the early days of his new administration last summer.
This closer working could mean British goods going into Europe would be treated on an equal footing with EU goods in terms of less Brexit bureaucracy in the customs arrangements.
This would be warmly welcomed by many businesses, particularly the UK High Street and its long-suffering supply chains. These are forced to perilously stretch and flex in line with uncertain consumer buying patterns, driven by cost-of-living concerns in what should have been a bumper peak period.
The so-called Golden Quarter of retail sales in the run up to the Christmas peak had lost its lustre, with figures from the British Retail Consortium (BRC) suggesting that the Black Friday and Cyber Monday events failed to deliver the festive cheer required to lift the sector and carry it into the New Year.
According to BRC and KPMG figures, UK retail sales were down 3.3 per cent overall with non-food sales carrying the burden of that slump (-10.3 per cent). The year-on-year effect could cost the retail sector £7 billion from lost sales and the impact of the new living wage, with rises in National Insurance contributions, higher prices and fewer jobs increasing the downward momentum as we push deeper into 2025.
Although the BRC/Sensormatic Footfall Monitor shows a slight improvement in the first weeks of 2025 – with store occupancy figures showing single digit increases – underlying concerns remain.
Retailers have also had to make economies in staffing following the Chancellor’s National Insurance increases, with Tesco, Sainsbury's and M&S all cautioning that the High Street is set to cut at least 300,000 jobs during the next three years, citing a perfect storm of higher costs and increased regulations.
Such changes will inevitably negatively impact shrinkage – unknown loss attributed to theft from internal and external dishonesty as a result of fewer shop floor colleagues.
Figures released in January from the BRC put external theft figures at £2.2 billion, up from £1.8 billion from the previous 12 months. This equates to 20 million theft incidents per year, or 55,000 per day.
Loss – known or unknown – contributes to a domino effect of the all-elusive stock file accuracy and on-shelf availability. What goes missing has to be replaced quickly to optimise peak sales which further impacts costs and competitiveness.
Such challenges and uncertainty on the High Street leads to uncertainty on the high seas, in terms of goods coming into the UK and businesses needing to accurately predict buying patterns.
Forecasting and supply chain transparency is therefore critical, which is where good customs practices come into their own in terms of mapping and assisting multinational retailers in the business of proactivity and staying responsive.
Retailers buy and sell, but they require bespoke customs expertise so that the billions of SKUs destined for stores from distant shores can adapt their flows to meet demand while conversely reduce waste and shrink – whatever the weather.
