The closing ceremony for the Paralympics 2012 on Sunday, and subsequent London parade, marked the end of the UK’s summer of sport and the end of an unusual calendar of events that coupled with the Queen’s Jubilee earlier in the year, retailers had hoped would deliver the boost in consumer confidence the country so badly needed.
In a trading update Sports Direct said that sales, which had soared by more than a quarter in the 13 weeks to July 29 had continued a strong growth since the end of July too boosted directly by the effect of the Olympics and the British team’s success in them.
But the BRC-KPMG Retail Sales Monitor seemed to show a different story with it saying that the net effect of the Games had been "minimal”. Its figures showed a decline in like for like retail sales of 0.4% compared to a year earlier when they fell 0.6%. Total sales rose 1.6%.
Although shoppers celebrated with food and food sales rose as a result non-food suffered. Within this category women’s clothing, furniture and home performed particularly poorly according to the BRC. Online sales meanwhile rose by the lowest amount since October 2008 – up only 4.8% in the month.
BRC director general Stephen Robertson said: “It’s clear people were absorbed by the magnificent Olympics and had little interest in shopping, especially for major items.”
The market needed a boost this month. New reports said that UK shop vacancy rates hit a 14.6% average in the first half of the year according to analysis from the Local Data Company which showed that with the exception of London every British region saw an increase in vacant shop levels in the first six months of 2012. In the North West, which suffered the most, more than one in five shops were empty.
Those figures were supported by a new report from property agency CBRE which claimed that in the first half of this year the number of shops operated by multiple retailers fell for the first time in 14 years.
The Chain Expansion report said the total number of chain store branches was down by 0.4% in the first half of 2012 – the first fall since such records began in 1998. It blamed the effect of the recession which has seen numerous administrations in recent months and the loss from the high street of names such as Past Times and Julian Graves.
Overall net chain store numbers should rise 0.5% in the year overall according to the report but CBRE pointed out the figures are normally closer to the 2-3% mark. The effect of this was supported by jewellery chain F Hinds, which revealed a pre-tax profits fall and in its Companies House report warned that the risk of closures in towns that it trades in was having a very real effect on its company. ”“As more towns succumb to this empty high street blight they become less desirable places to visit and this in turn may damage the remaining stores,” it said.
Today’s world isn’t just about the high street however and retailers know that to succeed they need a multichannel offer. So it is somewhat surprising to remember that supermarket giant Morrisons has yet to deliver on this. The fortnight saw the retailer confirm it was finally joining its competitors with an online transactional website but its first foray will be a wine website titled Morrisonscellar.com. It is expected that the retailer will follow with further general merchandise products but Morrisons has yet to reveal plans of an online grocery offer and refuses to do so until it can emulate the success of its rivals.
Whilst the last of the Olympics and Paralympics souvenirs were being cleared from shelves however it was Tesco that was lambasted last week for already putting Christmas product out for sale. It may be more than three months till the festivities begin but it is now a more important time to trade well than ever. Only then will retailers know if they have something to celebrate too.