“There’s £100 off that sir,” is a nice thing to be told when buying a TV in John Lewis.
“There’s £100 off that sir,” is a nice thing to be told when buying a TV in John Lewis. Getting to the checkout and discovering the discount is actually £200 is even better. Now is not a bad time to be a shopper with money to spend.
After the royal wedding and Easter related spike in sales, it’s been down to earth with a bump for many retailers in recent weeks. For most, the best that can be said about trading is that it has been volatile, with the weather clearly having pulled forward fashion sales.
In food retail the proportion of sales on discount is at unprecedented levels, but in non-food retail the expectation of discounts and use of them to generate sales is if anything even greater. While the distortions of the calendar have made genuine comparisons difficult, there’s little doubt that the general trend for UK retailers is downward. And for those selling food and electricals, the comps will get really tough over the next few weeks as they anniversary the world cup.
“There’s little doubt that the general trend for UK retailers is downward”
Price isn’t the only tool in a retailer’s armoury, but it’s a pretty big one in a market like this. Maintaining market share is going to be the name of the game in what is going to be a low-growth market, but the margins are under pressure too and the need to maintain profits means businesses are going to have to be as lean as can be.
It may not be the double dip some were fearing but, even so, a long hot summer lies ahead for retailers.
A strong voice for retail
In difficult conditions like this, and with few signs of a more retailer-friendly approach from the coalition, it’s vital retail has a strong voice in the corridors of power.
That’s why Rob Templeman’s appointment as the new chairman of the BRC is an inspired move. Everyone knows him as a private equity dealmaker par excellence and one of the most respected retail leaders, but behind his low-profile exterior what fewer people realise is how well-connected he is in political circles.
While the Government offers high-profile stunts like the appointment of its new high street tsar, daft proposals such as the European Consumer Rights Directive and Scotland’s supermarket tax continue to pour out from the politicians. It makes the role of the BRC in standing up for retail more important than ever, and having Templeman on board is only going to help.