Two weeks in retail - 9th October
The Christmas countdown has begun in earnest now we have hit October, despite it feeling like only yesterday that we were busy celebrating the Queen’s Jubilee or the Olympics.
But stores are filling fast with Christmas ranges and even the decorations are out for many.
Added to that the imminent Halloween boost and retailers will be hoping consumers still feel like celebrating.
They are feeling a little more positive if the latest figures from the BRC-KPMG Retail Sales Monitor are to be believed.
The figures, released this week, showed that UK like-for-like sales rose 1.5% in September with total sales for the month up 3.4%. The growth was largely driven by the impact of cold weather with clothing sales at their best since last Christmas.
BRC director-general Stephen Robertson said he believed customers were “less fearful” than they have been previously.
Retailers are certainly intent on putting their all into delivering a good Christmas. Marks & Spencer’s has announced it is taking on 20,000 Christmas temps this year – 5,000 more than it did last year -- as it becomes one of many to focus on customer service being the winning differentiator in the battle for sales.
Similarly at Matalan the discount retailer is doubling its additional Christmas temps to 5,000 this year. Meanwhile although online giant Amazon may not have a physical presence the e-tailer is hiring 10,000 Christmas staff to deal with the extra pressure it expects on its eight packing centres in the UK as it tries to predict its own demand.
John Lewis, which launched its Christmas departments instore last week, said that Christmas shopping had already begun with November levels of trade taking place on the last Saturday in September when sales grew 26.5% to £72.67 million.
At the UK’s largest retailer the news wasn’t quite so good after Tesco announced a fall in profits for the first half. Tesco group chief executive Philip Clarke has pledged a turnaround which will see downsizing of its Tesco Extra format. He said that that previous initiatives, such as the addition of 8,000 extra staff, had already boosted sales.
However whilst Tesco reported a 11.6% fall in first half trading profit and only a 0.1% uplift in like for like sales for the second quarter rival Sainsbury’s reported a 1.9% increase. The retailer was the main sponsor of the Paralympics in the summer- a move many have congratulated chief executive Justin King for.
In its own first half update earlier this fortnight, car accessories and bikes specialist Halfords revealed a like-for-like increase of 5.6% in the second quarter with group turnover up 6.2% for the second quarter to September 28. The news came as the retailer confirmed the appointment of former Pets at Home boss Matt Davies as its new chief executive. He had previously led the pets retailer for 10 years. Former Halfords boss David Wild left in July following a first quarter profits warning.
Inflation is obviously still having an effect on shoppers too. The latest BRC-Nielsen Shop Price Index for September, published earlier this fortnight, showed that overall shop price inflation slowed marginally to 1% in September – down from 1.1% in August. Food inflation stayed at 3.1% in September for the third month in a row. Robertson said it was further proof that retailers were doing all they could to try to protect their customers.