The word on retail street is not good…

The message is that Britain‘s clothing retailers are struggling. To underline this story, there has been separate profits alert from JJB Sports and a warning from French Connection that group sales in the second half are expected to drop. Although the inclement weather throughout the summer months has had a huge effect on sales, there is more than one force turning the screw here. With British consumers surely at the upper limits of their capacity to borrow more to spend, something has got to give. It tends to be the new suit, coat, and pair of shoes or even with the party season nearly upon us, the party outfit that has been given the chop first.

 

With there being no underlying growth in the market, the only game in town becomes stealing market share from each other. This is precisely what the leading retail players are engaged in. Both Next and Marks & Spencer are refurbishing and expanding their space, gambling that even in a shrinking market, consumers will gravitate towards their inspirational, value-for-money, propositions.

 

Few retailers are prepared to call the three-month run-up to Christmas. The consumer economy looks too uncertain, yet the penalties for getting the run rate wrong and either over or under ordering stock are bound to be severe in terms of lost margin or sales. Rarely has the retail environment looked more challenging, or for some more daunting. The next couple of months should give retailers a clearer position as to whether Santa is going to be good to them this Christmas.

 

MH