Retail/consumer products: sheltering yourself from the storm this festive season

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The cost of stock-piling in the lead-up to Christmas, combined with the pressure caused by the usual rent quarter day in December, causes cash-flow issues for many businesses. In recent years, changes in consumer habits (for example popularity of music and media downloads and so-called ‘show rooming’), the tightening of consumer budgets (due to lower disposable incomes and/or increased saving/debt reduction) and increasing costs for businesses (notably the cost of raw materials, fuel and rent) have added to the recipe for a perfect storm during the run-up to the festive season, as recently demonstrated by Blockbuster.

It is no coincidence then, that some of the most well-known retail/consumer sector insolvencies have occurred in this period. It is not just those businesses on the front line of retail that are caught, but also those in the supply chain who depend on the end-market businesses. Comet and Icetech are classic examples…

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