Following September’s spell of warm weather putting a dampener on the launch of autumn and winter collections, retailers had hoped that the cooler October weather would cause consumers to head to the High Street and begin to purchase winter items such as coats, scarves and boots. Unfortunately, last month’s sales remained relatively stagnant, causing many to pin their hopes on a bountiful Christmas trading season.
During October, like for like sales remained completely flat when compared to the same period last year according to the British Retail Consortium (BRC) and KPMG Retail Sales Monitor. Moreover, total sales rose by only 1.4 per cent, with many retailers continuing to blame the warmer than usual weather for consumers’ lack of enthusiasm for autumn and winter lines.
Although the result is a certain improvement from September’s figures, when like for like sales fell by 2.1 per cent, the current market conditions are extremely concerning given the proximity to the Christmas trading season – a time when, traditionally, sales have begun to climb in earnest. In fact, analysts have already begun to warn retailers that they may have to discount new lines as a means of shifting stock in order to maintain their bottom line.
KPMG head of retail, David McCorquodale, says; “Looking at these figures, most retailers will feel that they were tricked rather than treated in October.”
“Even the most experienced of shopkeepers could not have foreseen a heatwave at Halloween and most were left with sales which were flat at best.”
“Sadly, this warmer weather has left many fashion retailers with a substantial stock overhang, raising the question of earlier and deeper discounts as we get closer to Christmas – retailers need a nippy November to help them sell their winter stock before the season is out.”
Somewhat surprisingly, not even the temperate weather caused fashion retailers to perform worst overall, with grocery retailers continuing to languish at the bottom of the chain. On a three monthly basis, like for like food sales have fallen by 3.2 per cent while non-food sales have grown by 1.9 per cent, resulting in a low overall like for like sales growth of just 0.4 per cent.
While this rise, despite being very small, is an encouraging sign for retailers that the market is continuing to recover, September’s results were the worst since the height of the banking crisis in 2008. Should this trend continue, retailers may be faced with another downswing in the consumer market which, if worst came to the worst, could see another worrying rise in retail brand administrations.
BRC director general Helen Dickinson believes retailers are responding well to the pressures facing them at present by utilising clever marketing techniques.
She says; “Retailers have thought creatively about marketing solutions to incentivise sales of winter merchandise during the warmer weather.”
“Retailers’ preparation around stocking items required for Halloween celebrations, such as costumes of characters from animation feature films for children, meant a significant year on year increase in Halloween related sales.”
Do you thin consumers are simply saving for the Christmas season, or do you think underlying market issues are set to cause problems for retailers into the New Year?
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