The situation in the UK retailing and shopfitting sectors is currently depressed.
The UK market, following more closely to the United States than it does, or perhaps even should ( but this is a political matter), the rest of Europe, means that we have been more adversely affected by the sub prime mortgage market problem in the banking sector and its repercussions elsewhere in business than other countries.
The Housing market is experiencing falling house values for the first time in many years, and although interest rates have also been falling, this has not meant a lowering in the cost of borrowing, especially for housing. On the contrary, mortgages (loans for houses) have not only been rising as banks try to stem their losses, but are now very much harder to obtain than before. Many hundreds of thousands of home owners, whose mortgages were taken out in the good times and are now due for renewal are suddenly finding that the costs have risen sharply, (assuming they can even obtain a mortgage) at a time when they may be unable to sell their property because its value is now lower than when they bought it.
In addition, as elsewhere, prices of goods have been rising very fast. This not only affects raw materials, such as steel, chrome, plastics, cardboard, wood and other basic materials used in our industry, but also virtually all food stuffs, especially bread, rice, milk, and other commodities such petrol and diesel fuel, and the list goes on endlessly.
The net effect of all of this makes the consumer feel very uncertain about the future, and accordingly is spending less in the shops, which has the knock-on effect of making the retailers cautious their plans are being reduced, and sometimes stopped entirely.
Many retailers are experiencing financial difficulties, which a number going out of business in the past few months, et The Works, and Ethel Austin, a Liverpool based chain of over 300 clothing stores
Naturally, plans which have already been put in place have to come to fulfilment, but new plans are been reviewed, and everywhere retailers are seeking cost cutting measures from their suppliers at a time when costs are rising, an impossible situation.
There is an additional burden which some UK suppliers of shopfitting supplies are facing. Many shopfitting systems and equipment is purchased in the Eurozone and with the decline in the value of Sterling against the Euro, goods are additionally about 16% more expensive now than they were at the start of the year. This is causing problems for Europeans suppliers in the UK market, whereas importers from the Far East, in particular China, are not experiencing this aspect, as their goods are priced in dollars, and the dollar/sterling exchange rate has remained constant.
(Chinese suppliers are experiencing other problems, but that is another story.)
I am sorry not to be able to give a more optimistic picture of business in the UK, and am also sorry not to be able to present this information in person, but hope it will give some indication of the current market situation.
Ronald Cohen