Quiet November sees losses increase for average retailer

12:16 pm, January 10, 2020

THE average UK retailer produced a loss of £11,000 for November – a £3,000 increase on 2018 – according to latest data from ASE Automotive Solutions.

Mike Jones, chairman of the dealer profitability specialist, said today: ‘Being a mid-quarter month always makes November a challenge for retail profitability and 2019 proved no different,

‘When looking at the comparative we should remember that results were boosted by the delayed delivery of some WLTP cars during November 2018.

‘During November, we saw used car return on investment fall once more to just above 75 per cent. This was a result of a drop in sales volumes in the month compared to the prior year. Whilst not yet significant, this is an area to watch closely.’

But he added: ‘Somewhat surprisingly, we saw an increase in the return on sales during November, despite the increased loss in the month. This was a result of turnover falling by more than 10 per cent in the month, more than outweighing the fall in profits in the return-on-sales equation.’

Looking ahead, Jones said: ‘With these November results it is now certain that the full year profitability results will be down on the prior year, marking the second year of decline. Whilst the drop in turnover masks some of the decline when we look at the return on sales, retailer profitability certainly reflects the challenges we have seen in vehicle supply and consumer demand.’