Retail giants scale back expansion plans

The index for the commercial retail sector fell away sharply in August and was 30% lower than in August 2011.

Despite real household disposable income falling away at its fastest rate for 30 years, retail spending has held up surprisingly well over the past year.

However, there was a clear distinction between mainstream spending on the high street and supermarket spending, and this was reflected in construction. Retail construction in the last couple of years has focused on supermarkets, coffee and sandwich chains in addition to a small niche of high end retail funded internationally.

However, even supermarkets are scaling back on previously outlined expansion plans and this appears to be reflected in the retail index figure.
Contract awards, although being a good early indicator of future workload, are more volatile than workload so don’t expect output to fall 30% but it appears inevitable that retail construction work will be lower this year than last.