Two weeks in retail - 7th November
Did we really mention Indian summer in the last roundup? While some have woken to frosts in the last few days early snowfalls have also hit the UK sending shoppers scurrying for winter wardrobes.
The last fortnight has not been kind to some retailers either.
Electricals giant Comet, which has struggled for some time despite efforts to reinvigorate the business, finally collapsed into administration last week after its credit insurers pulled cover on the business and buyers are now being sought for the 240 store retailer. Comet was sold by its previous owner Kesa to investment firm OpCapita for £2 last November.
There has also been big change at general goods retailer Argos after it revealed it was abandoning the catalogue business model to concentrate instead on a digital offer with web browsers replacing instore laminated catalogues. It is also introducing wi-fi instore.
The retailer has pledged to become a digital retail leader following the new strategy unveiled by former Best Buy director John Walden, who joined the chain as managing director earlier this year. He said mobile shopping at the chain had exploded at the business. And although Walden said stores would still play an important role the company is to shut around 50 stores and relocate 25 over the next five years.
Marks and Spencer meanwhile warned of a 10% fall in pre-tax profits to £290 million for the 26 weeks to September 29 blaming unseasonably wet weather and the lack of a boost in sales from Jubilee and Olympics events. However it said that the business had performed better during the second quarter. Online sales during the second quarter rose 22% and a new concept store in Cheshire Oaks is performing 30% ahead of forecasts. A home concept has been introduced into 11 stores.
At the value end however Primark revealed what its parent called an “excellent” performance after a 3% rise in like for likes and a 15% rise in revenues to £3.5 billion for the year to September 15. The figure is more than double that of five years ago.
But the market continues to struggle. The latest BRC-KPMG Sales Monitor for October showed the worst sales growth for 11 months. UK retail sales values were down 0.1% on a like for like basis against October 2011. On a total basis sales were up 1.1% - the lowest growth in total sales – excluding Easter – since November 2011.
Meanwhile new figures from Visa Europe’s UK Expenditure Index, which uses card transaction date to calcuate total spending across all payment methods showed that UK household spending fell 2.9% in October. However Visa suggested the fall could be customers cutting back in October ahead of a Christmas splurge.
Nervous retailers will certainly be hoping that is the case over the coming weeks.