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Retail Christmas Cash Flow: Four Ways to Ease the Squeeze · The Resilient Retail Game Plan - retail insights, retail trends and best practices

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  Every September and October, I have exactly the same conversation.
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  My sales aren't bad, but why do I suddenly feel like I've got no money?
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  If that's you, then you are not alone.
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  Before we jump into today's episode, I want to let you know
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  about a couple of resources that I have that can help you out.
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  If you head to resilientretailclub.com/christmas, you can get our
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  free Christmas planner to help you have the best Christmas yet in 2026.
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  The other thing that will be really helpful is if you head to
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  resilientretailclub.com/cashflow.
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  You can get your hands on my free cash flow planner, which will help you really
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  understand all of the ins and outs of money coming in and out of your business
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  and how to manage it at this time of year.
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  Welcome to the Resilient Retail Game Plan.
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  I'm Catherine Erdly, and this podcast is here to share retail industry
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  trends, insights, and best practices.
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  For you, the retailer who's serious about building something that lasts.
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  So I wanted to put this podcast episode in.
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  I think it's a really important episode to have at this point in the year
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  because a lot of retailers that I talk to feel very stressed out by what
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  I call the Christmas cash flow pinch.
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  What happens is you have got plans for Christmas, you place your orders, and
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  then September, October comes along.
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  You have to pay for a lot of these products.
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  Even if you've used Faire's 60-day payment terms, you may still end up
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  with bills coming out now, which is really all about your stock that you're
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  purchasing for Christmas, but you haven't had your Christmas sales yet.
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  And the thing is that a lot of people feel very bad about this.
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  They feel like they've messed up.
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  They made some big mistake that maybe they don't know what they're doing.
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  And I wanted to talk about it today because I want you to
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  know that you are not alone.
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  This is something that happens to pretty much all retailers, and that
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  includes the really big guys as well.
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  When I worked in big corporate retail, we would have these meetings, which
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  was called Four Ps - Pushing Payments Past Peak - which was basically where
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  the finance team made us go through every single supplier and try and
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  see what we could do to move our invoices a couple of days or a week.
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  We'd split things down even further, extend payment terms, whatever
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  we could do, because whatever bit we could eke forward, then we would
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  be able to improve the cash flow of the business and basically make it a
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  little bit easier for the finance team.
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  And we're not talking about, they were worried we were gonna run out of money.
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  We're talking about, they were worried they were gonna hit the
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  bottom of their overdraft limit.
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  So it wasn't a question of not having any money in the bank, it was that they
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  had hit the bottom of the overdraft limit that they had been given.
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  So what we're seeing is then that retailers often have this issue.
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  They get to the point, this point in the year, it's just the way it goes.
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  For a lot of retailers, for example, at Paperchase, we would
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  be getting half of our revenue for the year in the fourth quarter.
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  If not more.
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  And this happens to a lot of businesses, which are very heavily gift focused.
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  So when you've got that situation, you have got a huge up and down
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  in terms of your sales coming in and the expenditure going out.
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  So a lot of people describe it as feeling like you're going up the slope of a
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  rollercoaster, you know that you're going up and up and up and up, and you've got
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  that sense of anticipation building.
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  You just don't know how it's gonna feel when you go down the drop.
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  Is it gonna be super exciting or terrifying, or maybe a bit of both?
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  So that's you, if you're feeling like that.
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  If you're thinking, I really messed this up, I should have done it differently.
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  I just want you to know that this is effectively a part of the way
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  that the retail industry works.
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  It's part of the way that the seasonality works and it's part of the pressure
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  of having a very seasonal business.
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  So every year retail businesses have to live in the gap between buying
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  the stock and selling the stock.
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  And the longer that gap, the more cash you need.
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  Christmas really stretches that gap out because you're buying more
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  stock than you normally would buy.
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  You may be buying earlier because you want to make sure that
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  you secure your best sellers.
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  The supplier invoices arrive before the sales do, and then your VAT payments,
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  your wages and your rent, they don't stop.
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  So, as I said, we have things like 60-day payment terms on Faire, which can be really
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  helpful, really beneficial to businesses.
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  They also have the Faire Christmas fair earlier in the summer, and people
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  often use that as an opportunity to top up for their Christmas orders at a discount.
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  But then it can also mean that those payments start hitting
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  at a tricky point as well.
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  So there are lots and lots of different things going on.
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  It's all incredibly normal and it's all something that I see every single
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  year and every single year if I ever mention it, people always tell me how
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  appreciative they are because they, most people get themselves in this
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  situation and feel like it was their own fault for messing things up.
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  So that is the first point, is that this happens.
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  It's natural, it's normal.
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  And what we just need to really think about is how do we work around it?
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  What can we do?
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  What can we possibly do to make this easier?
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  So four ways to ease the squeeze at this time of year.
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  The first thing that I want you to think about is any stock that you are currently
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  sitting on right now that is slowing you down, you just can't sit on trapped stock.
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  That isn't going to sell, that isn't even going to sell at Christmas.
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  Anything that is holding your money to ransom - which is what excess stock
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  does - anything like that has got to go, that has got to be cleared out.
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  And the more you can do that, the better your cash flow will feel and the
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  less of the squeeze that you'll get.
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  So make sure you are culling ruthlessly.
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  If you were thinking about doing that sample and seconds sale, do it now.
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  If you have so much stock that you feel like you can't clear it through the shop,
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  can you hire a venue, or a table at a market or an event or something
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  like that where you can put things on a discount and try and sell through?
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  You want to free up your cash, your space, your mental bandwidth.
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  This is one of the first elements that we look at with Stock Doctor.
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  You can find out more about Stock Doctor at stockdoctor.net, but this is
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  exactly what we do in terms of looking at where are the areas of trapped cash.
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  Now this is not about saying, oh, you've just gotta discount everything.
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  And obviously we are very much focused on trying to protect your brand, but
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  in terms of targeted discounting, this would be a great opportunity for
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  you to really look around and say,
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  Where is there anything that I can free up?
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  Now, if this is your prime stock that you know you're gonna sell at Christmas,
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  absolutely do not sell it at a discount.
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  Now we're talking about the stock that you probably, in your heart of hearts,
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  know you don't really wanna carry forward.
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  You don't even think it's gonna sell at Christmas.
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  You really just wanna make sure that you are free of it.
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  Cleared out, really reduced anything that's just
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  hanging around any clutter.
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  And you can do that through a flash sale or a story sale on social media, you
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  can do it through targeted discounts.
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  You could even just offer discounts to your mailing list if you don't wanna have
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  a big message everywhere talking about discounting, but do what you can now, you
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  can do an end of summer sale clearance.
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  Clear it out to make sure that you are not carrying anything that you just don't
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  think is really great stock, because that is where your cash is trapped.
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  So you wanna bring down any excess stock that you possibly, possibly can.
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  As I said, this is now - it's kind of like the 'check down the
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  back of the sofa for coins'
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  time of year.
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  Like, okay, well what have I got?
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  What can I work?
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  What can I release?
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  What's gonna help me walk through this tight time of year?
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  The second thing I would say is making sure that you're
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  really buying with intention.
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  So don't buy just in case.
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  Don't over purchase things that you think you might need at Christmas time.
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  Make sure that you have a sales forecast for Christmas.
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  Make sure you use that to create a stock budget.
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  Make sure that you then take that and look at a buying plan.
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  Again, this is all work that the Stock Doctors do for their clients.
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  We do a full Q4 analysis audit, work out exactly how much money they have got to
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  spend and what they should be spending on.
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  But think about every single penny that you're spending in the business.
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  It has a job to do.
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  So again, you don't want to just top things up just in case you want
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  to really go through and for every single item that you're purchasing,
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  ask yourself, is this a best seller?
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  Is this something that I absolutely need to have to make my Christmas work?
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  And how can I really just keep it as tight as possible so
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  that I'm not over-purchasing?
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  On that note as well, this is also a really good time to go through and look
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  at if there are any expenses coming out in your business, any subscriptions
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  that you don't really need anymore, anything like that, that you just think,
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  actually, this is something I can free up so that I've got just a little bit
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  of extra money as we go into Christmas.
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  The third thing to think about is flowing your stock in.
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  So do you really need everything delivered right now?
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  Have a look at whether or not you can move some of your deliveries back.
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  So, for example, can you split any of your deliveries?
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  Now, it will depend on suppliers.
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  Some suppliers, you just won't be able to split things, or you'll end up having
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  to bring it in earlier than anticipated because you just know if you don't,
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  it's gonna get stuck in customs or it's just gonna be a nightmare and
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  you're gonna miss the selling season.
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  So you don't wanna miss any sales.
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  But you also can have a look and just double check, are you bringing everything
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  in for the beginning of October?
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  For example.
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  Other things that you could maybe hold and bring in at the beginning
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  of November, or even the beginning of December, depending on your sales
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  pattern, you may actually see that December is still your biggest month.
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  So does everything need to be here right now for the middle of September
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  or even the end of October, if you don't think you're actually
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  gonna sell it until December?
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  Basically, going back to the anecdote from my days in corporate: that every
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  single day that you can push things back is another day that you don't have to
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  pay for it and it's all gonna help you.
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  So take a look at what you've got coming in.
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  Can you split it into two orders instead of one big order?
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  Can you hold off some particular brands?
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  Because sometimes it can be nice to have a bit of a refresh on your
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  Christmas stock a little bit into the season because it gives you something
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  new to talk about, something new and fresh to engage with your customer.
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  If you've been a really great customer to your supplier and
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  you've worked with them for years, ask them about payment terms.
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  Ask them if there's any way you could pay for this a little bit later.
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  Ask them if you could split payments.
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  Can you look at other things that you might otherwise
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  be paying out all at once?
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  Can you look to split those onto a payment plan?
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  What can you do to ease your payments?
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  Try and really push back your bills, reduce those and then
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  try and really flow your stock.
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  Are there things that can just come a bit later?
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  Does it all have to be there hand on heart for the 1st of November or is
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  that just going to cause you trouble?
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  Big retailers do this all the time.
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  I cannot tell you how much of my job used to be all about trying to
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  work out exactly what's going on with the deliveries, making sure I
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  pushed it back, making sure I eked out another day or two days or a week
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  from payment terms. We were constantly juggling things, moving it around
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  because we were just trying to reduce the amount of time between
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  us having to pay for something and it being bought by the customer.
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  Because the more you can really reduce that gap, then the better it will be.
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  If you really trust your suppliers and if you have some items which
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  are super popular at Christmas, you could consider doing a pre-order.
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  I would only suggest this if it's a supplier that you really, really trust,
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  because nothing is more frustrating than trying to unpick a pre-order where you
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  haven't been able to fulfil the orders for everybody or they're all running late.
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  So this can be a bit of a stress thing, but again, if you've got like
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  a certain number of products that you bring in that you know they sell
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  out immediately, why not offer it on pre-order to some of your customers?
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  'cause again, that really helps with this idea of when you are getting paid
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  versus when you have to pay the supplier.
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  So the fourth thing is don't panic.
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  The answer isn't about just stopping all expenditure.
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  It's often about trying to buy smarter.
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  It's about trying to manage that gap between paying for stock and selling
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  it and doing whatever you can to try and move that in your favour.
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  So the more you do this, the easier Christmas becomes.
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  But for sure, make sure go through everything and just see what could you
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  sell over the next few weeks to just really help with your bank balance.
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  So this week, make sure you're reviewing your old stock.
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  Make sure you build a Christmas buying budget.
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  Speak to suppliers if you need more flexibility, and go to
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  resilientretailclub.com/cashflow if you want to get my free cash flow planner
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  to help make it all make sense.
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  So now we've talked about managing your cash flow.
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  In the next episode, we're going to be talking about how to decide
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  what deserves your buying budget.
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  Don't forget to tune in next week.
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  And of course if you like, follow or subscribe, you'll be the first
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  to know about the next episode when it comes out next Thursday morning.
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  See.