More than halfway through the year, retailers’ eyes are now firmly fixed on the upcoming Christmas season.
For the past month, the industry’s Christmas in July shows have been full-swing.
From Game of Thrones-style meat centrepieces for the festive table to what retailers hope will become must-have new products, such as Christmas Eve boxes, an abundance of fare will compete for purse-share.
So how stands retail as it gears up for the golden quarter?
For much of the first half of the year, trading conditions, as recorded in the BRC-KPMG Retail Sales Monitor, were tough.
In January, “sales growth ground to a halt”, albeit against a strong comparative.
In February, growth was “subdued”, and March was “underwhelming”, although that month was affected by the timing of Easter.
The same factor brought a “welcome boost” in April, but in May “spending slowed”.
Encouragingly, June brought a “welcome pick-up” as like-for-likes across the industry climbed 1.2% versus a decline the previous year, while total sales advanced 2%.
But behind those most recent, positive headline numbers were some indications that the remainder of the year could be as hard to navigate as the first half.
Higher food prices drove the June retail sales rise, while average earnings fell in real terms.
All the big department store groups are in the process of reinventing themselves.
And many fashion retailers have had a lacklustre year so far.
On top of all that, channel shift continues. Online non-food sales rose 8.4% in the three months to June. In-store sales slipped 0.7% in total and 1.2% in like-for-likes over the same period. Over 12 months, the latter figure has averaged at a 2% decline.
This Christmas there remains all to play for, but it will be yet another needle-match when nothing can be taken for granted.
Tesco takes on Amazon with same-day delivery
Tesco this week became the first retailer to offer nationwide same-day grocery delivery. It is unlikely to be the last.
The venture is evidence of the ever-growing draw of convenience for time-pressed shoppers.
Tesco has offered the service in London and the South East since 2014 and this year there has been an 18% rise in demand for the service.
And this week’s grocery sales data from Kantar Worldpanel, revealing sales growth of 2.3% at Tesco – the highest among the big four – was “buoyed by a particularly strong performance online”, according to the monitoring firm.
Although an online service, Tesco’s store network is what enables it to extend delivery options. The participation of 300 branches allows the grocer to deliver to customers from Lerwick in the Shetlands to Launceston in Cornwall.
Tesco is charging customers between £3 and £8 for the same-day option but, even so, margins in grocery are pretty thin so managing the balance between costs and profitability will be vital.
However, Tesco is doing the right thing.
Tesco, and other retailers, cannot afford to stand by and let Amazon make all the running as customer expectations and shopping habits change.