With both the sun shining and the Olympics well underway the retail sector is now pinning its hopes on an upturn in consumer sentiment as we head into August.
And it’s urgently needed!
According to the GfK NOP UK Consumer Confidence Index confidence remained flat at -29 in July. The figure was the same as June and follows the news that UK’s GDP slipped by a further 0.7%. The index has remained between -29 and -31 for more than seven months now.
Meanwhile the CBI’s latest monthly Distributive Trades Survey showed that despite a third consecutive month of rising year on year sales and orders in July growth rates actually retreated. For the first two weeks of July 44% of retailers reported sales volumes up on a year ago, while 33% reported a fall. That mean a balancing growth rate of 11% -- almost of third of the 32% rise retailers had anticipated for July. For August retailers expect both flat sales and orders growth.
In the West End early reports suggested that tourists so far have stayed away from the shops. According to Experian footfall was down 12.4% on last year in both the West End and west London retail centres. The Centre for Retail Research had estimated the Olympics would add £561 million to retail spend.
However some retailers have already started cutting prices of themed souvenirs by up to 80% even before the sporting activity had begun. It had been estimated by the 2012 organising committee that sales Olympic souvenirs would top £1 billion.
But retailers are getting in on the action. John Lewis, the official department store provider to last week wrapped four of its stores, including its latest store in Stratford City which sits next to the Olympic stadium, with themed banners.
The past fortnight has seen the long awaited, and much anticipated, opening of Victoria’s Secrets – the US lingerie brand – which finally opened in Westfield Stratford -- the closest shopping centre to the sporting action.
Tesco also got in on the action with the opening of a pop-up shop, called Food to Go which will be open until the end of the Paralympic Games, in Bromley-by-Bow in East London outside its existing superstore, selling grab and go food and Official Team GB merchandise.
Meanwhile Ann Summers has reported a huge rise in sales up 78% year on year thanks largely to the impact of the Fifty Shades trilogy - supposedly it is selling 5,000 copies of the book a week.
Despite the economic climate however results from Harrods showed that shoppers are still investing in luxury after Harrods posted a 15% uplift in profits to £125.3 million for the year to January 28 on sales up 11% to £651.7 million.
And although it may only have been July the retailer last week opened its Christmas World department at its earliest ever point in order to take advantage of London’s Olympic shoppers...