After two bank holidays, a royal wedding and some cracking weather, this week had a bit of a back to school feeling.
And as we look forward to the first five day working week for ages, what better time for us to pick out 10 reasons to be cheerful about retailing.
The start of the year has undoubtedly been hard work and consumer confidence has been subdued. But while the pace of the recovery has been muted, the absence of any major economic shocks, plus the weather and the wedding, have made shoppers more inclined to spend.
This week’s unusually positive update from Next was the latest in a string of upbeat announcements from the majors. Trusted retail brands with the scale to ride out tough times are well-placed to have a good year.
But no one can afford to get carried away. The economic fundamentals haven’t changed, and consumers still face real pressures on their disposable income. The biggest retailers are doing disproportionately well, while smaller players like Thorntons and Blacks struggle.
Even Next’s performance needs qualifying. It points out that the bank holidays will have pulled forward sales from the next quarter, and when you strip out VAT and the web, like-for-likes were still down 3%.
The biggest issue for retail at the moment is that effectively we have two markets. Food and fashion are proving resilient, and have prospered in the hot weather. Furniture, electricals and entertainment are having a terrible time. As the structural changes in retailing accelerate, it’s a divergence we’re going to see widen further.
“The absence of any major economic shocks, plus the weather and the wedding, have made shoppers more inclined to spend”
Darke days at Comet
One of the companies in the eye of the storm is Comet, and the departure of managing director Hugh Harvey - revealed on Retail-week.com on Tuesday - was sad but no surprise. Harvey has worked hard to create a new identity for Comet as the friendly mid-sized electricals specialist, but it hasn’t worked and the business has been squeezed more than any of its rivals in what is a brutal market.
We’ll find out just how bad it has been next week when parent company Kesa updates on sales, but the answer is probably ‘very’. So where does Harvey’s able replacement Bob Darke take Comet? The competition from the internet, the supermarkets, John Lewis, Argos and Dixons is only getting more intense. His biggest task will be to come up with a clearer idea of what makes Comet different.