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Retail Talk



Recent news that September’s retail sales figures reveal a drop of 0.4% sent a shudder down the spine of the UK’s high streets. While some blamed a rise in utility costs and higher interest rates, the fashion sector pointed the finger at an unseasonalbly warm September. Whatever the reasons we take a look at the highs, lows and the on-coming predictions for the UK’s retail market.






+ While general retail figures saw a drop last month, apparel retailers came out on top with September sales, the back-to-school market and a heavy promotional push on autumn collections.




+ Online retailer ASOS annouced sales were up 93% for the 6 months up to 30th September and remain very confident about the on-coming Christmas and New Year period.



+ According to a survey of 200 retail executives at Barclays 6th annual Retail Industry Forum, 58% think that trading over the Christmas period will be good, particularly internet sales, which they expect to grow by over 10%. 



+ Hitwise UK, the leader in online competitive intelligence also predicts a strong Christmas season for online retailers. Based on 2 years of internet usage data of 8.43 million UK internet users, Hitwise predicts that visits to online retailers will increase by 8% over last year. This growth is driven by confidence in online shopping, on-time delivery, ubiquitous use of search engines and referrals from social networks. Hitwise also forecasts that a share of visits from social networks, such as MySpace and Bebo, will exceed 3% in December 2006. www.hitwise.com






+ The news of a 0.4% drop has caused alarm over the strength of consumer spending. Analysts had previously predicted sales to rise 0.3% for the period. Threats include – a rise in utility prices, an increase in interest rates and a rise in unemployment.



+ Despite predictions that Christmas trading will be as good as, if not slightly better than last year, the Retail Think Tank (RTT) has voiced concerns that it will not be enough to provide relief from the tough economic retail conditions over the past few months. RTT siad that the food sector will maintain its margins during the festive period but the non-food markets will be feeling the pinch.



The outcome…



+ There is no question that retailers, from independents to chain store players, have witnessed a tough trading period since the end of August 06. Even companies with sales growth such as JJB Sports and Ted Baker remain cautious. The pressure is on to get it right from buying to marketing and advertsiing.



John Lewis Online



+ Meanwhile, the high street maybe suffering but online retailing is on the up. Traditional shopping chains such as John Lewis, Next and Tesco are enjoying rapid expansion. Successful areas of online sales include – books, music, DVDs, computer hardware and software, clothing, accessories and footwear. Analysts forecast strong online sales growth over the next few years which will ease off by 2010.





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