In Brief: Retail News

 

Down: Rain and Retail a Poor Mix

 

 

 

The country has experienced the worst summer weather in years with the sun barely showing its face in June. Floods have submerged town centres, keeping consumers indoors.

 

 

On the high street, fashion retailers have been the worst hit by the soggy June as the lack of sunshine has meant consumers have delayed splashing out on a new summer wardrobe and have instead dug out their raincoats and umbrellas.

 

 

Stores have had to slash prices and bring sales forward to ensure footfall. Some executives privately admit June is one of the worst months they can remember after shoppers shied away from sodden high streets.

 

 

Figures from Nationwide building society reveal that consumer confidence fell for the first time in six months in June, reversing a rise in confidence recorded in May.

 

 

Last week, the CBI said that high-street sales in June eased to the slowest rate of growth since November, while clothing retailers had the toughest time in two years. The British Retail Consortium is set to unveil its June figures next week and analysts are expecting them to show a further weakening in sales growth.

 

 

MH

 

 

 

Up: M&S on Steady Course Despite Storms

 

 

Stuart Rose, the chief executive of Marks & Spencer, said yesterday that the high street chain was likely to experience a continued slowdown in market-share gains and in sales growth as he revealed the weakest quarterly sales figures in two years.

 

 

Mr Rose insisted that M&S would outperform the retail market and said that it had delivered “a pretty solid set of results in a strange quarter”.

 

 

Shares in M&S rose 9p to 641½p yesterday as the company showed that it had weathered June’s storms better than many had expected.

 

 

The company revealed a 2 per cent rise in like-for-like sales in the 13 weeks to June 30, double that forecast by analysts, who had downgraded their forecasts recently in the light of miserable weather.

 

 

Underlying sales of general merchandise, which includes clothing and home furnishings, rose by 2.9 per cent – considerably more than the 1 per cent expected – while food rose 0.7 per cent, slightly less than hoped for.

 

 

MH

 

 

 

Up: Shoppers Flock to the Westend for those Bargains

 

 

While UK retailers are undoubtedly experiencing a difficult trading period the Westend continues to thrive. Despite the soggy weather, rise in interest rates and threats of terrorist attacks shoppers are flocking to the capital.

 

 

Retail experts announced that customer numbers were up by an average of 14.9 per cent in June compared with the previous year. The Westend saw a 6 per cent rise in footfall for June compared with May, revealing that shoppers are out to bag those bargains.

 

 

James Bidwell, Chief Executive of Visit London said that: “Westend trade has outperformed the rest of the UK for 21 months and shows no sign of abating.”

 

 

 

JI

 

 

 

Down: Retailers Braced for Downturn After Terrorist Incidents

 

 

Britain’s retailers are bracing themselves for further pressure after terrorist incidents in London and Glasgow.

 

 

The British Retail Consortium said that there was a danger that the attempted attacks could adversely affect shopper numbers and deter overseas visitors.

 

 

VisitBritain, the tourist body that markets Britain to the rest of the world, said that it was ready to convene its emergency response group if necessary.

 

 

The terrorist attacks come at a sensitive time as retail and leisure operators are suffering because of the poor weather and the rises in interest rates. The growth in retail sales during May was the weakest since the 0.5 per cent reported in November 2006. The CBI believes that June may have been worse, with clothing sales at their lowest for two years.

 

 

The July 7, 2005, Underground bombings had a significant impact on retailers, with many of the high street’s best-known names adversely affected by a trading downturn in the months afterwards.

 

 

 

MH

 

 

 

Up: Burberry Continues its Strong Performance

 

 

Luxury brand Burberry unveiled that that its total revenue has increased by 30 per cent in the first quarter. The brand has just opened four new stores in Belgium, Italy, Spain and Florida along with six new concessions and three outlet stores. Sales for the first quarter totalled £167.5 million, better than city forecasters had predicted.

 

 

JI

 

 

 

Up: ASOS Sales Double

 

 

Online fashion retailer ASOS.com has reported continued success after more than doubling annual profits. The company posted pre-tax profits of £3.4 million for the year to 31 March, compared with £1.4 million the previous year.

 

 

JI

 

 

 

Down: Further Rate Rise Fears Hit Consumer Confidence

 

 

Consumer confidence fell for the first time in six months during June, as people braced themselves for higher interest rates, a survey showed.

 

 

The drop wiped out half of the strong rise in confidence recorded in May, with people worrying about the economy and jobs both now and in six months’ time. Consumers’ willingness to spend money was the only index to rise during June, increasing by two points, although it still remains broadly flat for the past six months and significantly lower than it was this time last year.

 

 

The fall in confidence in June reflects some weakening sentiment about the economy and jobs, both now and in the future, with higher interest rates likely to be a major factor behind this as consumers recognise their impact on the wider economy as well as on their own pockets.

 

 

There may also be a significant risk of a further increase in the autumn and it is expected that consumers will tighten their belts in the coming months. The main consumer confidence index dropped by four points to 95 in June, after jumping by nine the previous month.

 

 

People’s confidence in the current economic and employment situation fell by three points to 98 during June, following three consecutive rises, although it still remains nine points higher than during the same month last year. At the same time optimism about the future dropped for the first time in six months, losing four points to 93, with more people feeling negative about the future of the economy than those who feel positive.

 

 

MH