July/August 2026
ertonline.co.uk
The results show confidence is mixed rather than overwhelmingly positive or negative. Some retailers expect trading conditions to improve, others anticipate little change, while a sizeable proportion remain uncertain. That reflects the reality of today’s market, where rising costs and continued competition mean predicting the months ahead remains difficult. There’s a sense of realism in the responses
W hile
sales and customer demand often dominate conversations about retail performance, gross margin arguably
tells the more
important story. A business can grow sales, but if margins continue to shrink, profitability inevitably comes under pressure. And judging by the responses to the survey, margin is where much of the pain is currently being felt. More than half of respondents (52.6 per
cent) reported that gross margins had decreased slightly over the past 12 months, while a further proportion experienced a significant decline. By comparison, relatively few retailers said margins had improved, highlighting the continued pressure on profitability across the sector. It isn’t difficult to see what’s driving that
pressure. Retailers identify online-only competitors as the biggest pressure on their margins (Page 32), while many also point to rising operating costs and changing market dynamics. Together, these challenges make it increasingly difficult to remain competitive while protecting profitability. Trying to win that battle on price alone is unlikely to be the answer. Independent retailers have always differentiated themselves through expertise, service and trusted relationships rather than competing on price alone. The factors influencing customers’ buying decisions are explored in greater detail later in the report
(Page 31), highlighting where retailers can add value beyond the initial transaction. Supplier relationships will also play an
increasingly important role. As the findings later reveal, retailers place significant importance on stock availability, margin protection and after- sales support (Page 32), underlining the value of strong manufacturer partnerships.
How confident are you that trading conditions will improve over the next 12 months? After everything retailers have had thrown at them, you might expect confidence to be on the floor. Interestingly, that isn’t quite what the numbers show. While uncertainty continues to shape the market, many businesses believe there are reasons to be positive, reflecting the resilience that has long characterised the independent electrical retail sector.
rather than outright pessimism. Comments submitted alongside the survey suggest many businesses are adapting their operations instead of waiting for conditions to improve. Whether through investing in new product categories, expanding services or refining the customer experience, independents continue to evolve to meet changing market conditions. There are also reasons for cautious optimism. Consumer demand may be more selective than in previous years, but opportunities continue to emerge across a number of product categories, particularly those driven by innovation and changing lifestyles. These growth areas are explored in more detail later in the report (Page 31). Confidence is also closely linked to supplier
relationships. As retailers make clear elsewhere in the report, dependable stock availability, fair margin protection and reliable after-sales support remain essential to building confidence for the year ahead (Page 32).
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