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Two weeks in retail - 28th August

Scary as it may seem summer – as much as it was – is nearing an end.

Clothing stores are filling fast with autumn/winter merchandise and within weeks retailers will also begin remerchandising their stores ready for the Christmas trading period.

Although already fast becoming a distant memory the Olympics seems to have been one of the only boosts of the summer as the mixed weather has continued to frustrate both retailers and shoppers and retailers will be hoping the boost continues with this week’s beginning of the Paralympic Games.

At Westfield Stratford City, the new shopping centre that neighbours the Olympic stadium its owners said more than 5.5 million visitors were welcomed during the sporting celebrations which accounts for nearly 10% of its annual shopper target across its two London centres.

As ever John Lewis’ most recent trading results are perhaps the most indicative of the current retail climate. In its sales report for the week to August 18 it reported a 14.5% rise in sales which it attributed to a continuation of the Olympic feel good factor which also fed through to a rise in by nearly a third (31%) in sports equipment sales as shoppers were inspired to emulate their Olympic heroes with some sporting activity of their own.

The hot weather also had an effect as customers took full advantage of the limited sun when it did eventually shine. At Waitrose charcoal sales rose by 82%, suncream 124% and Pimms 83%.

With a week until children return to school for the new school year retailers are also focussing on their back to school ranges. John Lewis reported “encouraging sales” in this area.

Online sales also grew rapidly over the week up 40.3% over the week and with click and collect sales for both Waitrose and John Lewis up 85%.

The rise followed the announcement of the results from the British Retail Consortium (BRC) of its first report on e-crime in which it said e-crime posed the largest emerging threat to the retail sector with a total cost to retailers in 2011/12 of at least £205.4 million, including around £77.3 million of losses from frauds themselves and the prevention costs and legitimate business lost as a result of security measures.

The study said that e-crime represents 0.75% of the £28bn of online retail sales in 2011 – double the proportion of retail crime across all retail.

However the survey also showed that nearly two thirds (60%) of retailers would report more than 1 in 10 e-crimes to police because they felt they would not be dealt with effectively. It prompted the BRC to call for a better response from Government to the growing problem.

However the study also showed that too much security can also be problematic with those retailers who had put too many security barriers in losing £111.6m of business as customers were put off buying from them.

The fortnight also saw the loss of another name from the high street with the final closure of Julian Graves – the health snacks specialist that went into administration earlier this year. It followed the failure of a sale of the chain and saw all 189 stores closed this month.

The row about Sunday Trading, which was relaxed for the Olympics has also continued. Large retailers such as Asda have been in discussions with Government for a permanent relaxation of what many cite as antiquated trading laws which limit both the number of hours large stores can open and at what time they can open too. However much opposition still remains from the likes of shopworkers union Usdaw but also from Sainsbury’s chief executive Justin King who said that relaxing Sunday trading hours long term was not the solution to boosting the UK economy and, in a letter to a national newspaper saying that “Maintaining Sunday’s special status has great merit.”

In truth however it seems that anything that can be done to improve retailers woes would be useful in the current climate after the latest figures from the BRC/Springboard Retail Footfall and Vacancies Monitor showed that footfall worsened in the second quarter of this year with shopper numbers down on 2.3% year on year for the three months to July and worse than the 2% fall for the previous quarter. The rain was largely to blame with footfall down most in high streets (5.5%) and less in undercover centres (0.4%).

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