Financial News

  • 11 March 2014, 19:07

Floods Hit Retailers But Deliver Jobs Boost

The misery inflicted by the winter storms kept people away from the shops last month but provided a £250m boost to the jobs market.

Separate reports on Tuesday painted different pictures on the impact of the flooding - with monthly retail sales falling for the first time since April 2013, according to the British Retail Consortium and auditors KPMG.

Their report measured a 1% drop in like-for-like sales in February compared to the same period in 2013, as the poor weather took its toll on town centre stores.

However, online sales continued to grow - by 14.3% on a non-food basis.

David McCorquodale, head of retail at KPMG, said: "February saw a hiatus on the high street, with online sales soaring while in-store sales stalled.

"There's no doubt inclement weather exacerbated this trend, but it certainly underscores the importance of having a sophisticated online operation.

"The grocery sector remains fiercely competitive. February's figures were impacted by the discounting campaigns launched by the value grocers, which caused a sharp slowdown of overall price inflation in the food sector."

"There were some bright spots amidst the gloom. The effects of a rapidly recovering housing market are already feeding through to the retail sector, with sales of furniture and home accessories remaining solid."

While the insurance industry appears set for a bill totaling hundreds of millions of pounds for the storms, a report by employment firm Manpower showed demand was strong for those repairing the damage.

It pointed to £250m of growth in the wake of the wet weather and said that energy firms had also taken on extra staff to help restore power to thousands of homes, as well as more customer service workers to handle compensation claims.

The roll out of smart metering will also create jobs at utility firms into next year, it was predicted.

Manpower said firms in every sector were planning to take on extra staff in the coming months, the first time this had happened for six years.

Mark Cahill, managing director of Manpower, said: "The UK jobs market has reached a turning point. Whilst the overall outlook has been consistently positive now for a number of quarters, it's actually been six years since the employers we've interviewed have reported positive hiring plans in every single sector.

"In particular, the construction forecast has been in negative territory since 2008 and was one of the sectors hardest hit by the recession, but it has really bounced back.

"At last we can confidently say that the jobs market is starting to fire on all cylinders.

"With over 6,000 properties flooded, and an average repair bill of £30,000-£40,000, the beneficiaries of all this extra work will be builders who are already being called in to repair homes.

"Even in areas where flooding has been less of a problem, the persistent and heavy rain will have highlighted problems with roofs that need fixing, and that should help boost demand for the sector."

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