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Two weeks in retail - 24th April 2012

The ONS’ figures said that the monthly increase in sales rose 4.2%, the largest rise since January the previous year. As well as fuel sales which were the main contributor to the rise, the hot weather also fuelled strong sales for retailers as shoppers brought forward some of their summer wardrobe purchases.

However the ONS claimed that excluding petrol overall retail sales still rose 1.5 % on the month and the figures seem to be supported by John Lewis who also boasted of a 27.5% uplift in sales in the run-up to Easter with double digit increases in most categories and the iPad3 launch prompting a 133% rise in IT sales.

But good news has been somewhat limited this fortnight with warnings from a number of retailers issuing sales updates, as well as the collapse of high end fashion retailer Aquascutum which became the latest victim of administration.

Fashion retailer Supergroup, whose fashion formats Superdry and Cult are a student favourite, revealed its own woes when it revealed that miscalculations in its forecasting, as well as phasing of wholesale revenues and retail margins, would lead to a £7 million shortfall in profits.

 Two weeks in retail

Within 10 minutes of trading on the Stock Exchange, and following the shock announcement, the retailer lost a third of its value. Its new chief financial officer Shaun Wills was due to start at the business this week and will be urgently tasked with sorting out the retailer’s problems.

Forecasting seems to have been a common problem for retailers however as giant Marks and Spencer also reported that a “mixed” performance in its womenswear in its fourth quarter to the end of March was partly the result of stock shortages in some of its best-selling lines. The figures came as the retailer revealed UK food like for likes had grown 1% in the 13 week period but that general merchandise was down 2.8%.

And the UK’s largest retailer Tesco laid out its stall revealing how it hoped to win back sales and confidence with a £1 billion investment plan which will include refreshing 430 stores, recruiting new store staff and improving ranges. The move followed news of a 1% fall in trading profit to £2.5 billion in the UK for the 52 weeks to February 25. Group sales including VAT were up 7.4% to £72 billion. This week the fightback has included a voucher promotion where shoppers will get £10 off an £80 spend with any purchase online or instore.

With April’s showers forecast to extend well into May retailers will be getting increasingly nervous about trade over the next few weeks.

With the Diamond Jubilee and London Olympics still to come a positive effect on sentiment is likely, but whether, without a helping hand from the weather, it will be enough has yet to be seen.

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