With the traditional April showers having extended throughout most of May sales have been hit hard.
The BRC-KPMG Retail Sales Monitor, published earlier this month, showed that the rain was a major contributor to a like for like sales fall of 3.3% across the retail sector with a 1% fall in total sales for April.
This fact was reinforced this week by figures from the BRC/Springboard-ATCM Footfall and Vacancies Monitor for February to April 2012, which showed the worst drop in footfall last month since November 2009.
Like for like comparisons against a period that last year included both the Royal Wedding and a heatwave were always going to be tough, but the rain has hit fashion particularly hard.
French Connection last week issued yet another profit warning reporting a 10% slump in sales for the 15 weeks to May 17 at its UK and Europe division and like for likes down by 12%. At group level sales dropped 9.5% and the retailer said it was pessimistic about the second half of the year. It has already announced store closures.
At Marks and Spencer meanwhile the retailer reported a pre-tax profit fall from £780.6 million last year to £658 million for the full year.
The news wasn’t much better online either with online clothing recording its lowest ever growth since records began according to the IMRG Capgemini e-Retail Sales Index. April figures showed the clothing sector grew by only 1% during the month - the lowest in the 11 years the index has been in operation.
And yet figures from the ONS this week showed that UK inflation fell to 3% last month – its lowest since February 2010 with clothing – especially womenswear – cited as one of the factors behind the fall.
Retailers are working hard to increase sales however they can and for many that means new product ranges. Both Boots and John Lewis announced new ventures this fortnight and it was of little surprise that it was alongside positive results too. Boots announced it is to launch an evening meal range in September – the offer is currently in trial and development stage currently – and John Lewis announced a partnership with travel provider Kuoni who will open travel concessions in four of its stores this Autumn.
The announcement for Boots was alongside double digit growth in sales and trading profit in the past fortnight with group trading profit up 12.4% to £1.2 billion for the year to March 31 and sales up 18.4% to £23 billion.
Meanwhile John Lewis upped sales guidance, saying its like for like expectation was now “strongly positive” after outperforming during the first quarter with group sales up 12.2% for the first quarter to April 28.
Asda too announced great results with a 2.2% uplift in like for like sales for the 12 weeks to March 31, customer numbers up 2.9% on a like for like basis and basket spend up 2.1%. However the retailer has this week released its second ‘Mumdex’ – a survey of mums – which revealed economic confidence slipped 16% in the last quarter.
In the electricals sector Dixons also reported strong results revealing that although total sales for the year were flat and like for likes for the full year down 3% for the final quarter there was a 5% uplift in like for likes and the UK and Ireland, and Northern Europe trading ahead of their markets for the quarter. It said its full year group underlying profit before tax was expected to come in between £65 -£70 million – towards the top end of expectations.
The likes of Dixons have been through radical change in recent years but the collapse of greetings card retailer Clinton Cards this fortnight illustrated the danger of not moving with changes in customer habits. Administrators were appointed to the chain earlier this month and since then the closure of 350 stores -- half of the entire Clinton Cards estate and the entire 150 store Birthdays chain – has begun. First round bids for the chain must be in by next Friday.
Employment wise there was some respite - employment figures out in the last fortnight showed a fall in unemployment of 45,000 between January and March down to 2.63 million.
And there were new jobs too for some high profile names with former Peacocks boss Richard Kirk announced as the new chief executive of Poundstretcher and a new role for former Sainsbury’s finance director Darren Shapland who is to replace the formidable Lord Harris as chief executive of Carpetright.
With many retailers now bursting with Jubilee and Olympics product the race for sales is hotting up more than ever.