Accounts Barometer

The FSP Accounts Barometer monitors retailers' financial health using the Wealth Creation Index pioneered by the DTI, now Department for Business, Innovation and Skills.

In the year to April 2011 (the latest date to which accounts have been filed), the percentage of all UK high street retailers deemed Healthy was 42%. PLCs are generally financially stronger, with 55% deemed Healthy.

Amongst all retailers the trend continues upwards, suggesting that the proportions of financially stronger retailers amongst the survivors has increased.

Most retailers which fail have been identified as being financially Vulnerable. The combination of Wealth Creation Index with a few other indicators is a good predictor of retailers likely to enter administration.

SnapShop members can be notified when retailers on their Favourites List file accounts

Financial Health is measured at the Year End, or Accounting Reference Date (ARD).  Approximately 900 retailers are currently included in the sample, although, with a requirement to file within 9 months of ARD, the sample at April 201 only includes approximately 800 of these retailers.

Througout 2008, the FSP Accounts Barometer for PLCs fell, not turning untill late in 2009 when only 35% of reporting PLCs were Healthy. 

The Barrometer for All Retilers also dropped during 2008 but less consitently and dramatically.

For both sector, 2010 shows a marked increase in health. 2011 is showing the same increase.

Recent SnapShop enhancements now mean that members can be notified when their chosen retailers file accounts, allowing them to monitor the retailers' financial health. SnapShop also provides email alerts, advising members of new retailers, expansions and, like Oddbins et al mentioned above, administrations.

 

 

What is the FSP Accounts Barometer

With over 1,500 retail related companies being monitored by FSP and 900 of them currently having analysed accounts, the Accounts Barometer gives valuable insight into the health of the retail industry.

FSP analysis of retailer financial health covers a number of key indicators. A useful summary measure is the Wealth Creation Index (P2), which is defined by the Department for Business Innovation and Skills (BIS) as the ratio of Value Added to the costs of employees and depreciation. The graph shows all retailers with an accounting reference date (ARD) in the year to the end of the month shown and the percentage which are defined as at least "fairly healthy" with a P2 of 125 or more.

The total number of accounts records a dip in the most recent months, as there is a time lag between the ARD and accounts actually being filed. Readers should be aware that this smaller sample has an obvious impact on the % healthy trend line.

The barometer is updated regularly as accounts are filed.

The BIS Guide and Wealth Creation Efficiency Index by retailer are available to members of SnapShop

The content of this report has been derived from statistical, trade and published sources. Whilst FSP has used its best endeavours to ensure the accuracy of the information, it cannot accept liability for any data therein nor any interpretation made there from.