Atradius data shows positive outlook for retailers

Claims data from Atradius (https://www.atradius.co.uk), one of the UK’s largest credit insurers,

reveals an improving picture for many retail business, with an average 24% decrease in

claims paid in the sector since December 2024.

Month-on-month payment defaults in Retail Stores fell 33% from November to December 2024, as many revelled in extra revenue from Christmas shoppers, with the biggest decline in payment defaults on-on-year since 2023 being recorded for Consumer Durables (down 6%), Furniture (down 66%), and Retail Stores (down 27%).  

“New data highlights resilience among UK retailers, even amidst the ongoing cost-of-living crisis and the impact of the Autumn Budget.  However, with the post-festive season lull and a challenging Q1 on the horizon, businesses must act swiftly to combat the retail blues,” comments Ruby Hartery, Senior Underwriter, Atradius UK.

While sub-sectors like Wholesale, Consumer Durables, and Furniture experienced rapid declines in claims, the picture is far less optimistic for clothing and footwear firms moving forward.  These sectors saw payment defaults spike dramatically, with increases of 250% and 100% in December alone, underscoring the uneven recovery across the retail industry.

“Navigating the evolving economic landscape requires agility, especially with uncertainties surrounding Labour Government policies. Retailers must enhance customer service both online and in-store to build consumer confidence and overcome quieter periods like Blue Monday,” continues Hartery.

“Securing supply chains and trade agreements is crucial during volatile times.  It is important that firms prioritize financial resilience and implement customer-focused strategies if they are to thrive throughout 2025.  In the face of ongoing challenges, trade credit insurance protects businesses from payment defaults, ensuring stability amid uncertainty.”
 
Leading retailers such as John Lewis, M&S, and Watches of Switzerland[1] have weathered recent economic challenges by focusing on a combination of premium product quality, strategic pricing adjustments, and a commitment to product longevity. By aligning their offerings with shifting consumer expectations while maintaining profit margins, these companies have demonstrated how adaptability can drive resilience.  Despite this, the broader retail landscape remains precarious, with a record 17,349 shop closures forecast for 2025, with chains such as New Look, Shoe Zone, and The Body Shop expecting to close stores this month[3], reflecting the ongoing pressures facing the industry.