Two weeks in retail - 30th January 2013
A lacklustre Christmas followed by snow -- hardly great news for retailers who are still battling for sales.
The problems even impacted John Lewis who said sales momentum slowed as the snow hit with fashion particularly affected by the drop in footfall resulting in a 6.8% fall in sales for the week to 19 January.
But with the cold snap evidently now over – albeit replaced by warnings of gales and rain at least shoppers can get mobile again. Not that they need to do so literally of course.
The results from John Lewis showed that in today’s world snow doesn’t shop the determined shopper with online sales up 40.3% for the brand in the week quoted above.
Although it was clearly evident in the Christmas trading statements in the past few weeks a new report this fortnight has shown the surge in shopping online – and particularly via mobile devices – as shoppers chose to hunt for gifts from the comfort of their own sofas over Christmas.
The IBM Digital Analytics Benchmark: Christmas Retail Report suggested a 16.4% sales growth in December compared to the same period a year before with sales up 45% on the previous year on Boxing Day in particular.
In December the report shows that mobile generated nearly a quarter of all traffic – with this rising to more than a third browsing from mobile devices on Christmas Day itself and mobile sales hitting nearly 30%. iPad traffic in November tripled year-on-year, growing more than 200% according to the report.
The results were supported by another survey from the British Retail Consortium, whose BRC-Google Online Retail Monitor for Q4 2012 shows that search volumes on tablet devices grew a massive 238%, peaking on Boxing Day when the number of searches was twice that of Christmas Eve.
Although it’s a great move for making shoppers lives easier, retailers who fail to keep up with the changes are struggling to survive in today’s digital world and sadly nowhere is that more evident than with the collapse of HMV earlier this month. The entertainment firm has seen its debt bought by restructuring specialists Hilco who are attempting to put a rescue plan in place that will save at least half of the chain’s 220 British stores.
There was some good news with the retailer reporting a 45% rise in like for likes and a 77% jump in footfall for the four days to January 23. However although some claim this was a result of support for the brand the reality is that bargain savvy customers are increasingly sniffing out a bargain as and when chains fail and the 25% off blue cross sale launched by the retailer is likely to be the main reason for growth.
HMV has joined fellow retailers Jessops and Blockbusters in administration since Christmas.
Retailers will still have their work cut out but can persuade customers to spend if they get their offer right. Footfall fell 1.2% in December against the same month the previous year according to the BRC -- with fewer visits to high streets, shopping centres and out of town locations. However the figures showed that shoppers were going with a mission rather than browsing with more money spent per trip than previously.
These figures were supported by the Office of National Statistics who said that in December 2012 retail sales volumes rose by 0.3% compared to the same month the year before. The amount spent rose by 0.7%. However it was the lowest level of growth since December 2010.The ONS said the estimated weekly spend for the month was £8.5 billion.
Given the conditions retailers are inevitably nervous about the months ahead. Indeed a survey of retailers as part of the BRC’s Bond Pearce Retail Employment Monitor suggested that cost pressures including business rates mean that half of those retailers surveyed have plans to reduce staffing levels in the first quarter of this year – with many letting their seasonal staff go. Last year only a third anticipated doing so. However the figures did show a 0.6% rise in retail employment for the final quarter of 2012.