The UK retail sector continues to grapple with significant challenges, from rising operational costs and a greater tax burden to shifting consumer behaviours and macro-economic uncertainty. The surge in online and social media shopping taken its toll on high street footfall, with The Centre for Retail Research forecasting approximately 17,350 retail site closures in 2025. Despite a modest 2.6% increase in January retail spending, the sector remains cautious.
David Gilbert, fractional CFO at The CFO Centre, which provides part-time CFOs to over 800 businesses across the UK, is the former finance director of The White Company and Karen Millen. He knows only too well the challenges of navigating tough market conditions and the importance of building business resilience through smart, forward-looking decisions that align with the company’s strategic goals while maintaining flexibility to navigate unexpected challenges.
He shares his five key strategies that every retail CFO should consider.
1. Simplify business operations
Many retailers struggle because they overcomplicate their business models. Expanding into too many channels, such as physical stores, online platforms, franchising, and concessions, often creates inefficiencies that are difficult to manage. Instead of chasing every possible revenue stream, businesses should focus on a clear and well-defined strategy.
For new brands, this means avoiding the temptation to scale too quickly, whilst for established companies, it may require a reassessment their operations and simplifying areas that have become overly complex. A leaner, more focused business model allows for better control, improved customer experience, and ultimately, stronger financial performance.
2. Align financial planning with business strategy
Financial planning cannot and should not operate in isolation. A robust financial strategy must be fully integrated with the company’s operational goals, branding efforts, HR policies, and organisational purpose. Today’s CFO doesn’t simply create financial forecasts, they act as facilitator who brings together different departments.
Rather than viewing finance as a back-office function, ensure that budgeting, forecasting, and resource allocation are front and centre. By taking this approach, businesses can avoid financial blind spots and make more informed decisions that drive sustainable growth.
Finance teams must work closely with sales, operations, and marketing to ensure that everyone is aligned toward the same financial goals. Involve your teams to become better positioned to drive financial stability and long-term growth.
3. Manage cash flow and working capital with precision
Retail businesses often face significant cash flow challenges, particularly during seasonal fluctuations. Christmas, for example, is a critical period for many retailers, and poor mid-year cash flow planning can leave a business vulnerable if holiday sales do not meet expectations. As a result, many retailers find themselves in financial distress in January and February when rent payments and supplier invoices come through.
To build financial resilience, CFOs must develop detailed cash flow forecasts and implement strong working capital management strategies. This includes closely monitoring stock levels to avoid excessive inventory, being prepared to sell excess stock at a reduced margin if necessary. The finance team must also ensure debtors such as franchise partners make timely payments, and there is good management of supplier payments.
Retailers benefit from flexible financing options such as revolving credit facilities, which allow them to purchase inventory in advance without committing to long-term debt.
4. Build strong relationships with key stakeholders
Building strong relationships is the key to financial resilience. A CFO must establish strong connections with banks, investors, suppliers, and internal business leaders to ensure long-term stability. Having open and transparent communication with financial institutions is essential, as retailers often need to access credit lines or renegotiate terms during challenging periods. These conversations might appear tricky to navigate, but an open and honest dialogue early on is always the best policy,
Investors and private equity partners also play a crucial role in a retailer’s financial health, so reach out to them now to keep them informed and engaged – this increases the likelihood of securing additional funding when needed. Similarly, strong supplier relationships can lead to better payment terms, improved buying power, and more reliable delivery schedules.
5. Embrace technology and adapt to trends
Artificial intelligence and automation are transforming financial processes by streamlining accounts payable, enhancing inventory management, and providing real-time financial insights. Businesses must stay ahead of technological advancements that can improve financial efficiency and decision-making.
Consider implementing scalable IT systems that ensure financial date is accurate, up-to-date and seamlessly integrated across different departments, allowing you to analyse customer trends, track key performance indicators, and make data-driven decisions.
Retail finance teams must also recognise the importance of agility. Market conditions change quickly, and having the ability to respond to new trends, whether it is shifts in consumer behaviour, supply chain disruptions, or economic downturns, can make the difference between thriving and surviving. A resilient retail business is one that can pivot quickly while maintaining financial stability. With the right plans in place, teams can be equipped with the know-how to weather any storm.
In an increasingly challenging retail landscape, financial resilience is necessity. The role of the CFO is not just to report on the past, but to shape the future. A business that is financially resilient is one that is prepared for both challenges and opportunities, and combines financial discipline with adaptability, innovation, and strong leadership.
The CFO Centre currently supports more than 800 businesses in the UK & Ireland through the provision of senior, part-time CFOs. For further information visit https://www.cfocentre.com/gb.
